ADMS 4010 Notes Chapter 1-8 PDF

Chapter 1: Introduction to Organizations and their environments. 4 Historical perspectives: 1. Scientific management (Taylor) : focus on individuals - make them more productive = job design should be based on precise, scientific study of individual situations. 2. Administrative princi...

Chapter 1: Introduction to Organizations and their environments. 4 Historical perspectives: 1. Scientific management (Taylor) : focus on individuals - make them more productive = job design should be based on precise, scientific study of individual situations. 2. Administrative principles (Fayol):focus on organization - make it more efficient = look at the design and functioning of the organization as a whole. 3. Bureaucratic organizations: designing and managing organizations on a impersonal, rational basis through elements like clearly defined authority and responsibility, formal record keeping, and uniform application of standard rules. 4. Hawthorne Studies: People are important = positive treatment of employees improved their motivation and productivity. Contemporary challenges: 1. Globalization 2. Intense competition 3. Sustainability & ethics 4. Speed of responsiveness 5. The digital workplace 6. Diversity 7. Digital orgs & Big data analytics Big Data Analytics: which refers to technologies, skills, and processes for searching and examining massive sets of data to uncover hidden patterns and correlations. Organizations: are social entities that are goal directed, designed as deliberately structured and coordinated activity systems, and linked to external environment. 2 perspectives on organizations: 1. Closed system: not depend on environment; it would be autonomous, enclosed, and sealed off from the outside world. A true closed system cannot exist. MECHANISTIC DESIGN: - Centralized structure - Specialized tasks - Many rules & formalized - Vertical communication - Strict hierarchy of authority - Typical contingency factors: - Large size - Efficiency strategy - Stable environment - Rigid culture - Manufacturing tech  2. Open system: must interact with the environment to survive; it both consumes resources and exports resources to the environment. It must continuously adapt to the environment. Open systems can be enormously complex. ORGANIC DESIGN: - Decentralized structure - Empowered roles - Few rules, informal - Horizontal communication - Collaborative teamwork - Typical contingency factors: - Small size - Innovation strategy - Changing environment - Adaptive culture - Service tech System: is a set of interacting elements that acquires inputs from the environment, transforms them, and discharges outputs to the external environment. Subsystems: perform the specific functions required for organizational survival, such as boundary spanning, production, maintenance, adaptation, and management. Centralization: means that decision authority is located near the top of the organizational hierarchy. Knowledge and control of activities are centralized at the top of the organization, and employees are expected to do as they are told. Decentralization: decision-making authority is pushed down to lower organizational levels. In a highly organic organization, knowledge and control of activities are located with employees rather than with supervisors or top executives. People are encouraged to take care of problems by working with one another and with customers, using their discretion to make decisions. Task: is a narrowly defined piece of work assigned to a person. Role: is a part of a dynamic social system. A role has discretion and responsibility, allowing the person to use his or her judgment and ability to achieve an outcome or meet a goal. Contingency: - means that one thing depends on other things = for organizations to be effective there must be a “goodness of fit” between their design and various contingency factors. What works in one setting may not work in another setting. There is no “one best way.” - Structural & contextual dimensions should fit with one another 2 Dimensions of Organizational Design 1. Structural dimensions: provide labels to describe the internal characteristics of an organization. They create a basic for measuring and comparing organizations. - 1. Formalization: Written documentation - 2. Specialization: Division of labor / given tasks - 3. Hierarchy of authority: Who is in charge of who? - 4. Centralization: Who makes decisions? Delegation  - 5. Professionalism: Formal education and training - 6. Personnel ratios: Number of employees in each area 2. Contextual dimensions: characterize the whole organization & its setting - Describe the organizational setting that influences and shapes the structural dimensions. - represent both the organization and the environment - Includes: - 1. Size: Number of people in the organization - 2. Technology: Tools, techniques, and actions concerning how production gets done - 3. Culture: Set of underlying values and beliefs - 4. Environment: Anything outside of the organization - 5. Goals and strategy: Purpose and scope of operations Performance Outcomes: 1. Efficiency: amount of resources used to achieve goals. It is based on the quantity of raw materials, money, and employees necessary to produce a given level of output. 2. Effectiveness: the degree to which an organization achieves its goals = how well you achieved what you intended 3. Stakeholder approach: integrates diverse organizational activities by taking into account that different stakeholders want different things - Stakeholder: is any group within or outside of the organization that has a stake in the organization’s performance. - Employees: satisfaction, pay, supervision - Customers: High-quality goods & services, service, value - Creditors: creditworthiness & fiscal responsibility - Management: efficiency & effectiveness - Government: Law & regulation obedience & fair competition - Union: worker pay & benefits - Community: Good corporate citizen & contribute to community affairs - Suppliers: satisfactory transactions & revenue from purchases - Owners & shareholders: financial return 4 levels of analysis: normally characterize organizations: - Level 1 (smallest) - the individual human being is the basis building block of organizations. The human being is to the organization what a cell is to a biological system. - Level 2 - the next higher system level is the group or department. These are collections of individuals who work together to perform group tasks. - Level 3 - the next level of analysis is the organization itself. An organization is a collection of groups or departments that combine into the total organization. - Level 4 (biggest) - Organizations grouped together into the next higher level of analysis => interorganizational set and community + Interorganizational set = group of organizations with which a single organization interacts.  + Other organizations in the community also make up an important part of an organization’s environment. Organizations: social entities that are goal-directed, designed as deliberately structured and coordinated systems, and linked to the external environment - Exist for different purposes - Profit vs non-profit: - Bring together resources to achieve desired goals - Produce goods & services efficiently - Facilitate innovation - Use modern manufacturing & info technologies - Adapt to & influence a rapidly changing environment - Accommodate challenges of diversity, ethics, coordination - Create value for owners, customers, employees Organizational behaviour: is the micro approach to organizations because it focuses on the individuals within organizations as the relevant units of analysis. Organizational behaviour examines concepts such as motivations, leadership style, and personality, and is concerned with cognitive and emotional differences among people within organizations. Organization theory: is a marco examination of organizations because it analyzes the whole organization as a unit. Organization theory is concerned with people aggregated into departments and organizations, and with the differences in structure and behaviour at the organization level of analysis. Organization theory is the sociology of organization, while organizational behaviour is the psychology of organizations. Meso theory (Meso means “in between”): concerns the integration of both micro and macro levels of analysis. Individuals and groups affect the organization, and the organization in return influences individuals and groups. Mintzberg’s Organization Configuration - Technical core: perform basic work of the organization - Management: direct, implement, coordinate - Technical support: innovations, help org adapt to the environment - Administrative support: help smooth operation Other organizational designs - Chaos theory: Focuses on the unpredictability of the environment – organizations need to be adaptable - Efficient performance org.: Functional/routine - Learning org.: Openness/adaptability - Bossless design: People at all levels are contributing ideas Chapter 2: The External Environment Organizational environment: all elements that exist outside the boundary of the organization that have the potential to affect all or part of the organization. - Domain: is the chosen field of action. It is the territory an organization stakes out for itself for its products, services, and market served => defines the organization’s niche and defines those external sectors with which the organization will interact to accomplish its goals - Sectors: subdivisions of the external environment that contain similar elements. → can be further subdivided into the task environment and general environment. - 2 main subdivision & 10 sectors: - 1. Task Environment: sectors with which the organization interacts directly and have a direct impact on the organization’s ability to achieve its goals, includes: - 1. Industry - 2. Raw materials - 3. Human resources - 4. Market - 5. International - Domestic sectors impacted by international events - 2. General environment: sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it, includes: - 6. Government - 7. Sociocultural - 8. Technology - 9. Financial resources - 10. Economy Green environment: couldn’t find definition => found definition on Google: conscious of environmental protection and sustainable wellness, including promoting enlightened consumers, sustainable energy, and renewable power investment. Environmental uncertainty: - applies primarily to those sectors that an organization deals with on a regular, day-to-day basis. - Focused on the task environment 1. Simple-complex dimension: concerns environmental complexity, which refers to heterogeneity => Number and dissimilarity of external elements relevant to an organization’s operations - Simple = small numbers & similar external elements - Complex = large number & different external elements 2. Stable-unstable dimension: refers to whether elements in the environment are dynamic.  - Stable = remains the same over a period of months or years, or experiences readily predictable change. - Unstable = shift abruptly and unexpectedly. - 4 types of uncertainty & responses ENVI. Simple + Stable Complex + Stable CHANGE LOW UNCERTAINTY LOW-MODERATE UNCERTAINTY Stable Characteristics Characteristics 1.Small & similar elements 1.Large & dissimilar elements 2. Elements change slowly/ remain 2. Elements change slowly/ remain same same Ex: manufacturer, distributor, Ex: universities, insurance, chemical processor companies Responses: Responses: 1. Mechanistic structure = formal, 1. Mechanistic structure = formal, centralized centralized 2. Few departments 2. Many departments, some 3.No integrating roles boundary spanning 4. Current operations orientation 3.Few integrating roles 5. Low-speed response 4. Some planning 5. Moderate-speed response Simple + Unstable Complex + Unstable HIGH-MODERATE UNCERTAINTY HIGH UNCERTAINTY Unstable Characteristics Characteristics 1.Small & similar elements 1.Large & dissimilar elements 2. Elements change frequently & 2. Elements change frequently & unpredictably unpredictably Ex: e-commerce, fashion Ex: computer firms, aerospace firms, clothing,music, toy telecommunication, airlines Responses: Responses: 1. Organic structure = teamwork, 1. Organic structure = teamwork, participative, decentralized participative, decentralized 2. Few departments,much boundary 2. Many departments spanning differentiated,extensive boundary 3.Few integrating roles spanning 4. Planning orientation 3.Many integrating roles 5. High-speed response 4. Extensive planning 5. Forecasting,High-speed response Simple Complex ENVI. COMPLEXITY Adapting to Environmental Uncertainty: 1. Positions & departments 2. Buffering roles: purpose= to absorb uncertainty from the environment + help technical core stay focused & function efficiently. - surround the technical core - exchange materials, resources, and money between the environment and the organization. 3. Boundary-spanning roles: purpose = to link and coordinate an organization with key elements in the external environment. => exchange of information: detect, bring in and send out information to the environment → presents the organization information in a favourable light. 4. Differentiation: difference in formal structure among departments (specialization) 5. Integration: is the quality of collaboration among departments. Formal integrators are often required to coordinate departments. 6. Mechanistic organizational system (chap 1): when the external environment was stable, the internal organization was characterized by rules, procedures, and a clear hierarchy of authority. Organizations were formalized. They were also centralized, with most decisions made at the top. 7. Organic organizational system (chap 1): In rapidly changing environments, the internal organization was much looser, free flowing, and adaptive. Rules and regulations often were not written down or, if written down, were ignored. People had to find their own way through the system to figure out what to do. The hierarchy of authority was not clear. Decision-making authority was decentralized. 8. Planning, Forecasting & Responsiveness Controlling the environment 1. Control elements => Resource dependence: means that organizations depend on the environment but strive to acquire control over resources to minimize their dependence. => Minimizing uncertainty by controlling environmental elements 2. Control domains: a. Change the domain: Move industries & build relationships b. Political activity & regulation: Implement/remove regulation barriers c. Trade associations: Pooling resources together d. Illegitimate activities: Unlawful and unethical activities Establishing interorganizational linkages: 1. Ownership: buy/ control interest in another company 2. Formal strategic alliance: contracts & joint ventures 3. Executive recruitment: 4. Advertising & Public relations: influence customers 5. Cooptation: when leaders from important sectors in the environment are made part of an organization.  -Ex: when influential customers or suppliers are appointed to the board of directors => are introduced to the needs of the company and are more likely to include the company’s interests in their decision making. 6. Interlocking directorate: is a formal linkage that occurs when a member of the board of directors of one company sits on the board of directors of another company. = a communications link between companies and can influence policies and decisions. a. Direct interlock: when one individual is the link between two companies. b. Indirect interlock: occurs when a director of company A and a director of company B are both directors of company C. They have access to one another but do not have direct influence over their respective companies. Chapter 3: Strategy, Organizational Design, and Effectiveness Organizational Purpose 1. Mission (aka official goals): Reasons for existence (WHAT) + shared values and beliefs 2. Vision: Core ideology - future-oriented (WHY) 3. Operative goals - short-term, specific measurable goals - designate the ends sought through operating procedures - explain what the organization is actually trying to do. - Link to primary tasks an organization must perform. - Overall performance - Resources - Market - Employee development - Innovation & change - Productivity 4. Strategy: Plan for interacting with the competitive environment to achieve goals (HOW) - Goals define where the organization wants to go and strategies define how it will get there. Strategy 1. Porter’s Competitive Strategies: focuses on how organizations can gain a competitive advantage in their industry. Identified three generic strategies: - A. Focus strategy: concentrate on a specific market segment or niche. They tailor their offerings to meet the needs of that segment. Example: Rolex targeting luxury watch enthusiasts. - B. Differentiation strategy: create unique products or services that stand out from competitors. They focus on quality, innovation, and branding - May use advertising, distinctive product features, exceptional service, or new technology to achieve a product perceived as unique. - Targets customers who are not particularly concerned with price. Example: Apple’s design and user experience. - C. Low-cost leadership strategy: tries to increase market share by emphasizing low cost compared to competitors. - seeks efficient facilities, pursues cost reductions, and uses tight controls - Example: Walmart, West jet 2. Miles & Snow Typology: classifies organizations based on their strategic orientation. It considers 3 core problems: - A. Prospector strategy: innovate, take risks, seek out new opportunities, and grow. - Suits a dynamic, growing environment, where creativity is more important. - Example: Nike, Volvo. - B. Defender strategy: concerned with stability, hold on to current customers - Not innovates or seeks to grow. - Focus on internal efficiency and control to produce reliable, high-quality products for steady customers. - Suits declining industry or stable environment. Example: Hudson’s Bay Company. - C. Analyzer: tries to maintain a stable business while innovating on the periphery. - Between the prospector and the defender. - Some products will be targeted toward stable environments in which an efficiency strategy designed to keep current customers is used. Others will be targeted toward new, more dynamic environments, where growth is possible. - Attempts to balance efficient production for current product lines with the creative development of new product lines. Example: Rogers Communications. - D. Reactor strategy: No strategy, just respond to environmental threats and opportunities. - No defined long-range plan => takes whatever actions seem to meet immediate needs. Example: Eatons’s 3. Kim & Mauborgne’s Blue Ocean Strategy: - Encourages organizations to create uncontested market space (blue oceans) rather than competing in crowded markets (red oceans). - NOT focus on how to outpace rivals, beat competitors in RED OCEANS - FOCUS on creating new BLUE OCEAN where there’s less competition - 3 components to success: - A. Have the right perspective: recognize that managers can shape industry conditions & create/ expand new markets - value innovation - B. Apply the right set of tools: provide a set of market-creating tools like the 3 tiers of Non-customers - help managers identify various levels of ppl who don’t current patronize the industry in which the company operates - C. Use a humanistic process to create on involved workforce: acknowledge people’s fears, insecurities, need to be treated with dignity, desire to matter - Engagement - involve others in change process - Explanation - give ppl a clear account - Reassurance - let ppl know that their opinions are valued, what to expect & clarify roles & responsibilities Contingency theory (strategy influences design) - The right mix of design characteristics fits the contingency factors - 5 contingencies factors: - 1. Strategy - 2. Environment - 3. Technology - 4. Size/ Life Cycle - 5. Culture 3 Contingency Approaches (to measure organizational effectiveness) 1. Goal approach: concerned with the output side and whether the organization achieves its goals in terms of desired levels of output (how well org has achieved them) => Goals can be identified & quantified 2. Resource-based approach: assesses effectiveness by observing the beginning of the process and evaluating whether the organization effectively obtains resources necessary for high performance. => Ability to obtain scarce resources & successfully integrate & manage them 3. Internal-process approach: looks at internal activities and assesses effectiveness by indicators of internal health and efficiency. Integrated Effectiveness Model - combines internal & external approaches, include 4 emphases: 1. Open-systems emphasis: an aspect of the competing-values model that reflects a combination of external focus and flexible structure. 2. Rational-goal emphasis: an aspect of the competing-values model that reflects values of structural control and external focus 3. Internal-process emphasis: an aspect of the completing-values model that reflects the values of internal focus and structural control 4. Human relations emphasis: emphasis on an aspect of the competing-values model that incorporates the values of an internal focus and a flexible structure Balance scorecard (BSC): a comprehensive management control system - combines internal & external approaches (metrics) - balances traditional financial measures with operational measures relating to an organization’s critical success factors. - 4 major perspectives: - 1. financial performance - do actions contribute to better financial perf? - measured by profit, return on investment (ex) - 2. customer service - How well do we serve our customers? - measured by customer satisfaction, loyalty (ex) - 3. internal business processes - Do work processes add value to customers & shareholders - measured by order-rate fulfillment, cost per order (ex) - 4. organization's capacity for learning and growth - Are we learning, changing & improving - measured by continuous process improvement, employee retention (ex) Competing-values model: tries to balance a concern with various parts of the organization rather than focusing on one part. This approach to effectiveness acknowledges that organizations do many things and have many outcomes. It combines several indicators of effectiveness into a single framework. Structure: the formal reporting relationships, groupings, and systems of an organization. Chapter 4: Fundamentals of Organizational Structure Organizational Structure: - 3 key components in DEF: - 1. Designates formal reporting relationships: including the number of levels in the hierarchy and the span of control of managers and supervisors. - 2. Identifies the grouping together of individuals into departments and of departments into the total organization => Vertical hierarchical structure - 3. Includes the design of systems to ensure effective communication, coordination, and integration of effort across departments. => Horizontal structure - Interaction among employees 2 types of structures - Vertical vs Horizontal - Formal structure reflected in the org. Chart - Managers always search for the best combination of vertical control & horizontal collaboration, centralization & decentralization. 1. Vertical structure: management at the top, physical work done by employees below organized into distinct, functional departments - Designed for efficiency & control - Specialized tasks - Strict hierarchy, many rules - Vertical communication & reporting systems - Few teams, task forces, or integrators - Centralized decision making: decisions are made at top levels 2. Horizontal structure: which organizes employees around core processes. - Designed for learning - Shared tasks & empowerment - Relaxed hierarchy, few rules - Horizontal communication, face-to-face - Many teams & tasks forces - Decentralized decision making : decisions are made in lower levels Information-processing perspectives 1. Vertical linkages: coordinate activities between the top and bottom of an organization, and are designed primarily for control. - Hierarchical referral: Chain of command, in vertical lines (= communication channels) - Rules/plans: rules & plans are established so repetitious problems can be routinized (ie: budget plan) - Vertical information system: - Strategies used to increase vertical info capacity => important for control - Include reports, written information, computer-based communications (typically distributed to managers) - Information systems make communication up and down the hierarchy more efficient. 2. Horizontal linkage: refers to the amount of communication and coordination horizontally across departments - Information systems: cross-functional, computerized, knowledge-sharing platforms (+ building relationships) - Direct contact (between managers or employees affected by a problem) - Create Liaison roles - communicate & coordinate between 2 dept & report back to their own functional dept - Put depts close together for regular contact - often exist between engineering and manufacturing departments because engineering has to develop and test products to fit the limitations of manufacturing facilities. - Task forces: A temporary committee of different dept members to solve short-term problems. - direct horizontal coordination and reduce the information load on the vertical hierarchy - Full-time integrator: Coordinates several departments for longer projects (ie: product manager, project manager) - Does NOT report to any functional dept → outside of the dept - Responsible for an innovative or change project - Teams: Permanent task force (long-term) – strongest horizontal linkage - Often used with integrator - Usually used when there’s a large-scale project, major innovation, new product line - Relational coordination: frequent, timely, problem-solving communication - carried out through relationships of shared goals, shared knowledge, and mutual respect - NOT a device or mechanism like other elements → a part of the culture of the organization. - If have high level of relational coordination → ppl share info freely across dept boundaries, on a continuous basis Virtual cross-functional teams: made of members from various countries Virtual team: made up of organizationally/ geographically dispersed members who are linked primarily through advanced information and communications technologies => use the Internet and collaborative software to work 3 elements of the design of organizational structure: 1. Required work activities: What type of departments are needed? 2. Reporting relationships: How do the departments fit/work together in the hierarchy? - Chain of command (vertical lines on hierarchy): the first vertical device - the hierarchy. - If a problem arises that employees don’t know how to solve, it can be referred up to next level in the hierarchy. - When the problem is solved, the answer is passed back down to lower levels. The lines of organization chart act as communication channels. 3. Departmental grouping options: Creating groups with common supervisors, resources, and goals => 8 options Departmental grouping: - affects employees because they share a common supervisor and common resources - are jointly responsible for performance + identify and collaborate with one another. - 8 options: 1. Functional grouping: similar function, work processes, knowledge, skill - ex: marketing 2. Divisional grouping (aka product structure or strategic business units): all people required to create each product are group together, under 1 executive - ex: marketing, manufacturing, sales work together to create toothpaste => grouping is based on organizational outputs 3. Multifocused grouping (matrix): use 2 structures simultaneously, could divide by product function & geography (domestic vs global) or function & product division - ex: functional & divisional - when both technical expertise and product innovation and change are important - When functional, divisional, and geographic structures combined with horizontal linkage will not work. - Functional matrix: the functional bosses have primary authority and project or product managers simply coordinate product activities. - Product matrix: the project or product managers have primary authority and functional managers simply assign technical personnel to projects and provide advisory expertise as needed. 4. Horizontal grouping: organized around core work processes, end-to-end work, information, and materials flows that provide value directly to customers. Flat from start to end - ex: customer service 5. Virtual network grouping (aka modular): depts are loosely connected & geographically dispersed - electronically connected for info sharing & task completion. - Outsourcing: contract out certain corporate functions to other companies. - Operational advantage: short-term trouble avoidance - Strategic advantage: long-term contribution to maximize opportunities. - coordinates activities from a small headquarters. 6. Holacracy team structure: a shift toward extreme self-management model. - Members are personally responsible for planning their own work, coordinating their actions with others, developing their own personal relationships, acquiring needed resources, and taking corrective action - Teams/ circles: - Everyone works on a team in this structure - Individual roles are collectively defined & assigned within various teams - Evolve, form, and disband when conditions change - Design & govern themselves - Leadership is distributed & contextual 7. Hybrid structure: combines characteristics of various approaches - tailored to specific strategic needs. - used in rapidly changing environments due to greater flexibility. 8. Geographical structure: each unit locates in each region, includes all functions required to produce & market P&S in that region to cater that region’s unique needs - Central headquarters: brand recognition,coordinates fundraising services, some administrative functions - Regional units: daily control & decision making - Horizontal coordination within a region is emphasized rather than linkages across regions/ headquarters - Strengths & weaknesses similar to divisional structure Re-engineering (aka business process re-engineering) = the redesign of a vertical organization along its horizontal workflows and processes. Process: an organized group of related tasks and activities that work together to transform into outputs that create value for customers. Application of Structural Design - Each structure is applied in different situations and meets different needs - Structural alignment: Balance between vertical control and horizontal coordination - Structural deficiency: Poor structure (doesn’t fit with organizational needs) - Decision making is delayed/ lacking in quality - Inadequate information sharing - Lack of innovation - Employee performance decline - Too much conflict New Directions 1. Images of Organization - Gareth Morgan: all theories of org & management are based on implicit images or metaphors that lead us to see, understand, & manage org.s in distinctive yet partial ways - Morgan’s 8 metaphors:  2. Boundaryless organization - Jack Welch: boundaries in org prevent them from achieving high levels of success as they become consumed by turf wars => try to permeate their boundaries to be more flexible & responsive to stakeholders - 4 types: - Vertical/ hierarchical - Horizontal/ interunit - Geographic - External/ interorganizational 3. Humanocracy - Gary Hamel & Michele Zanini - 7 principles to create structures that are human-centric: Chapter 5: Designing Organizations for Social and Environmental Purpose. DESIGNING A DUAL ORGANIZATION 1. Hybrid Organization:pursue both profit and social missions within a single organization. - tries to be financially self-sufficient while spending profit to create a positive impact on a social or environmental problem. 2. Mission drift: when hybrid org gives less importance to their social mission because creating value for paying customers & generating profit becomes more important. => Hybrid organizations tend to produce internal conflict if not structured properly 3. Structures/ techniques a. Use separate departments - 2 separate depts - 1 for social, 1 for profit depending on the nature of the workflow & clients - => more effective - Integrated structure: put everyone in 1 dept where all work toward both social & profit goals b. Hire employees with a balanced mindset - Easier method: socialize ppl with little/no work experience into the mental logics that would best serve its clientele. - Provide on-the-job learning for both technical & social expertise - a balance training program c. Set clear goals and measure effectiveness - Easy to measure financial aspects, but hard to measure social impact - Financial indicators = sales, revenue growth, return on assets d. Collaborate with like-minded organizations - Develop institutional similarity e. Keep the social mission alive in the mindset of employees  - Minimize potential conflicts btw different logics - Make jobs more meaningful & goes beyond money f. Choose the correct legal framework - Benefit Corporation: - a for-profit entity that specifies positive social and environmental impacts + profit in its legally chartered goal - to create public benefit in terms of a positive material impact on society and the environment. HYBRID CONFLICT - Logic: a person’s basic assumptions, values, and beliefs that he or she thinks should guide an organization’s behavior. - 2 types: - Commercial - focus on selling P&S for profit, hierarchical control, made to serve shareholders, legitimacy is based on technical & managerial expertise to beat competition - Social welfare - focus on societal needs, to achieve a higher social goal, democratic governance, include local stakeholders inside & outside the org, legitimacy is based on contribution & commitment to the social mission => are often in conflict as people (employees) tend to prioritize one logic over the other Corporate social responsibility (CSR): management’s efforts to make choices and take action so that the organization contributes to the welfare and interest of all organizational stakeholders CSR Performance:Companies can now be assessed and measured on their performance along environmental, social, and governance (ESG dimensions) - Investors can invest in companies based on their ESG performance - ESG scores can range from 0 to 100 on items such as Environment (e.g., water use, fuel management) Social Capital (e.g., customer privacy, community development) Human Capital (e.g., diversity & inclusion, compensation & benefits) Business innovation (e.g., product societal value, quality & safety) Leadership & Governance (e.g., business ethics, executive compensation) Sustainability: ability to generate wealth without compromising social stewardship or responsibility for the environment. => meeting the current and future needs of stakeholders while preserving the environment and society so that future generations can meet their needs as well. Conscious capitalism (aka share value approach): organizational policies and practices that both enhance the economic success of a company and advance the economic and social conditions of the communities in which the company operate Have a higher purpose Conscious business leaders Recognize stakeholder groups as important and independent Embrace conscious business values Triple bottom line: Measures sustainability effectiveness with emphasis on People, Planet, Profit => measure its social, environmental, and financial performance - Stakeholder approach & Stakeholder mapping: Identifying needs, expectations, and values of each stakeholder group and integrating such information in various organizational activities - Bottom of the pyramid (BOP): proposes that large multinational corporations can alleviate poverty and other social hills, as well as make significant profits, by selling to the world’s poorest people. Consequences of Doing Good - Positive relationship between heightened socially responsible behavior and a firm’s financial performance - People tend to prefer working for companies with high levels of ethical behavior and social responsibility Designing a Structure for Executing a Sustainability Program Engaging employees: leaders to inspire employees & provide multiple avenues to help them incorporate sustainable thinking into everyday work life Engaging outside stakeholders: publish annual reports detailing goals & metrics for ongoing sustainability projects - regular and repeated communication is crucial Engaging a system of accountability that includes metrics and rewards (set goals, measure & reward):  ○ Sustainability planning is more effective when it’s part of the annual strategic planning process ○ Establish clear KPI metrics tied to important tangible goals with clear assignments of responsibilities Sustainable Development Goals Chapter 6: Interorganizational Relationships. New ways of work: Global competition and rapid advances in technology, communication, and transportation have created amazing new opportunities for organizations => increase cost, making it difficult to gain advantages on one’s own Managers need to manage a whole set of organizational relationships Interorganizational relationships: ongoing resource exchanges, flows, and connections between 2 or more organizations Organizational ecosystem: a system formed by interaction of a community of organizations and their environment - cut across traditional industry lines. Coopetition: when leaders from important sectors in the environment are made part of an organization =>organizations competing for customers but also coming together to share resources (e.g., marketing events, sharing suppliers for discounts) - Organizations now need to co-evolve with others in the ecosystem so that everyone gets stronger. With co-evolution, the whole system becomes stronger => Important horizontal linkages - Simultaneous engagement with competitive and cooperative behaviors between 2 or more actors - Operational level: activities like resource exchange and knowledge sharing - Stakeholder level: agreement on quality standards - Environmental level: establishment of a joint venture 4 Interorganizational Frameworks - Helps assess the environment and adopt strategies to suit their needs Resource-dependence - Dissimilar & competitive - Strives for independence and autonomy (minimize dependence & influence environment to make resources available) - Dependence on resources depends on: 1. Importance of resources to the organization 2. The power held by those who have control over resources - Resource strategies 1. Interdependent relationships: purchase ownership in suppliers, develop long-term contracts, build relationships 2. Interlocking directorships: add members of supplier’ BOD to company’s BOD, join trade associations, merge, political lobbying - Power strategies: exercise power to dictate small supplies, use technologies to manage supply-chain relationships Collaborative networks => Similar org type but competitive examines how new organizations fill niches left open by Population ecology established organizations examines how a rich variety of new organizational forms benefits society. => Different org type but cooperative explains why and how organizations legitimate themselves in the Institutionalism larger environment and design structures by borrowing ideas from each other. => Similar org type & cooperative Collaborative network: - Dissimilar & competitive - Organizations become dependent on other organizations to increase value and productivity for both. => become more competitive and to share scarce resources - Major reasons: - sharing risks when entering new markets, - sharing costs, - enhancing organizational profile in selected industries/ technologies. - Cooperation is needed for greater innovation, problem-solving, & performance. - Changes from adversarial to partnership orientation Population ecology: - Similar & Competitive - Organizational diversity and adaptation within a population (i.e., set of organizations engaged in similar activities) => survival of the fittest (Struggle for existence) ○ Old organizations die out and new ones replace them (it’s hard to adapt in an environment when large investments have already been made) - Organizational form: an organization’s specific technology, structure, products, goals, and personnel - can be selected or rejected by the environment - Organizations try to find niches - a domain of unique environmental resources/needs to support itself ○ Generalists: offer a broad range of products/services - broad market ○ Specialists: provide a narrower range of products/services - narrow market - The changing environment determines whether organizations survive or fail - Population: a set of organizations engaged in similar activities with similar patterns of resource utilization and outcomes => are always changing, and so organization populations are also changing - Variation: appearance of new, diverse forms in a population to response to the needs of the external environment - Selection: whether a new organizational form is suited to the environment and can survive - Retention: preservation and institutionalization of selected forms Institutionalism: - Similar & Cooperative - Organizations survive and succeed through similarity between organizations => under high uncertainty, organizations imitate others in the same institutional environment. => Institutional similarity: the emergence of common structures, management approaches, and behaviors among organizations in the same field. - Institutional Environment - norms and values from stakeholders that organizations try to follow to please stakeholders. - Legitimacy: the general perspective that an organization’s actions are desirable, proper, and appropriate within the environment’s system of norms, values, and beliefs. - Isomorphism: Institutional similarity – the emergence of common structures and approaches Mimetic forces: copy others that appear to be successfully in the environment Normative forces: pressures to adopt PROFESSIONALISM, structures, techniques, or management processes because they are considered by the community to be up-to-date and effective Coercive forces: external pressures such as legal requirements exerted on an organization to adopt structures, techniques, or behaviours similar to other organizations  Chapter 8: Organization Size, Life Cycle, and Declin Organizational Size: - Pressure to grow - Most of the world relies on small and mid-sized businesses - Big and small companies each have their own characteristics and strengths - Big-company/Small-company hybrid: Combines a large corporation’s resources and reach with a small company’s simplicity and flexibility (e.g., reorganizing into small groups) LARGE company advantages SMALL company advantages - Economies of scale - Responsive, flexible - Global reach - Regional reach - Vertical hierarchy, mechanistic - Flat structure, organic - Complex - Simple - Stable market - Niche-finding - Employee longevity, raises & - Entrepreneurs promotions Organizational Life Cycle: - Showcases how an organization grows - Stages are sequential and follow a natural progression - Each stage is characterized by a different environment and rules - Before moving on to the next stage, an organization will experience a crisis STAGES CHARACTERISTICS CRISIS Need for leadership 1. Entreprene - start-up of an organization urial - Creativity: creating a P/S and surviving the - # of employees is a marketplace. problem - Centralized - founders are entrepreneurs & -Need to adjust structure/ bring in more competent ppl controller - Informal & nimble => Provision of clear - Focus on marketing, production direction & goals - Long work hours Need for delegation with 2. Collectivity - Clear goals & direction control - Depts are established - Hierarchy of authority, job assignments, division of -Middle management want labour more autonomy - Employees identify with org’s mission => Addition of internal - Members feel part of a collective systems - Informal  Need to deal with too much 3. Formalizati - Bureaucratic - rules and standard procedures red tape on - rules, enable organizational activities to be performed in procedures, a predictable, routine manner. -Too much documentation & and written - Increase rules, procedures, and control systems. formal procedures -Innovation is restricted documentati - More formal on - Less communication => Development of team - Specialists are added work & collaboration - Increased decentralization - Product groups/ other decentralized units may be formed to improve coordination - May implement incentive systems Need for revitalization 4. Elaboration - becomes more flexible -Temporary decline - Collaboration & teamwork -Shifting out of alignment - Formal system are simplified with the envi - Decentralized - Need a renewal (ie: innovation, ppl, - Teams are formed across functions/divisions effectiveness) After elaboration stage, may enter 1 out of 3 following scenario: - Streamlining, small-company thinking OR - Continued maturity OR - Decline Personnel Ratios: A bureaucratic characteristic - relates to personnel ratios for administrative, clerical, and professional support staff. - The deployment of ppl various functions & depts - how many ppl in which dept 1. Administrative ratio: smaller in large organizations => org experiences administrative economies as they grow larger. 2. Clerical and professional support staff ratio: the bigger the organization, the higher the ratio because of the greater communication and reporting requirements, and the greater need for specialized skills Bureaucracy & Control: - Organization typically become more bureaucratic as they grow - Bureaucracy: Rules and standard procedures enable organizational activities to be performed in a predictable, routine manner - Control strategies: managers must have the authority to maintain control over the organization: 1. Rational-legal authority: employees’ belief in the legality of rules and the right of people with authority to give command. - the basis for both creation and control - the most common base of control in organizations worldwide. - Mostly in governments 2. Traditional authority: the belief in traditions and in the legitimacy of the status of people exercising authority through those traditions. - the basis for control for monarchies, religious institutions, and some organizations in Latin America, and the Middle East. 3. Charismatic authority: devotion to the exemplary character or to the heroism of an individual person and the order defined by him or her. - Organization reflects the personality and values of the leader.  - What organizations try to do: - Decrease bureaucracy - Lean & flexible - Saves on money - Employees are increasingly more “professional” => less formalization Market control: when price competition is used to evaluate the output and productivity of an organization. Clan Control: the use of social characteristics, traditions & values such as organizational culture, shared values, commitment, traditions, and beliefs, to control behaviour. - require shared values and trust among employees. - important when ambiguity and uncertainty are high. - most often used in small, informal organizations or in organizations with a strong culture Self-control: from the values, goals, and standards of individuals. - employees set their own goals and monitor their own performance - need strong leaders to clarify boundaries Decline: - DEF: A condition in which a substantial, absolute decrease in an organization’s resource base occurs over a period - Associated with environmental decline due to organization domain experiences either: - a reduction in size (ie: shrinkage in customer demand/ erosion of a city’s tax base) or - a reduction in shape (ie: shift in customer demand). - 3 factors leading to decline: 1. Atrophy: become inefficient and overly bureaucratized. - Ability to adapt to the environment deteriorates. - Follows a long period of success, because an organization takes success for granted, becomes attached to practices and structures that worked in the past, and fails to adapt to changes in the environment: Ex: blockbuster vs Netflix 2. Vulnerability: inability to prosper in its environment. - Usually to small organizations that are not yet fully established. - vulnerable to shifts in consumer tastes or in the economic health of the larger community.  3. Environmental decline or competition: reduced energy and resources to support an organization. - When the environment has less capacity to support - New competition increases the problem, especially for small organizations. - 5 models of decline: 1. Blinded stage: Internal and external changes. With timely information, leaders can adapt but they didn’t see such changes 2. Inaction: Denial – pretending all is okay. Leaders need to acknowledge the slow decline. 3. Faulty Action: Big issues that can’t be ignored. Action must be taken. No room for mistakes 4. Crisis: Panic – many sharp changes. Employees are angry. Need a major re-organization. 5. Dissolution: Decline is irreversible. Close the organization. Downsizing - individuals are laid off permanently/ are not replaced when they retire. - a part of many change initiatives in today’s organizations. - Causes: Re-engineering projects, mergers and acquisitions, global competition, and outsourcing - How to implement downsizing: - Communicate a lot (transparency with employees) - Help displace workers (training, severance packages, extended benefits) - Help remaining employees cope Incident command system (ICS): is commonly used by organizations such as police and fire departments or other emergency management agencies that have to respond rapidly to emergency or crisis situations.