Understanding Organizations: Key Concepts and Management
Understanding Organizations: Key Concepts
An organization is composed of people, environment, strategy, specialization, coordination, and communication. It is a system containing elements, objectives, inputs, and outputs.
Strategic Concepts and Management Elements
Hard Elements: Strategy, structure, systems.
Soft Elements: People, management style, competencies/capabilities, underlying processes.
Strategic Dimensions
Scope: Size and composition of the target market (can be narrow or broad).
Scale: Whether the product/service is different in any way, and the strength/competency of the firm.
Competitive Generic Strategies
- Cost: Economies of scale, logistics, resources.
- Differentiation: Design, technology, reputation, customer service (cost is still important but not dominant).
- Focus: Satisfying needs in one area, achieving cost savings through focusing.
Other Views of Management Functions
Behavioral: Dealing with human effect in the organization.
Systematic: Based on the idea of a system containing inputs, outputs, and feedback loops.
Management Theories
Theory X: Managers view employees as needing authoritarian, repressive, and tight control, leading to a depressed culture.
Theory Y: Managers view employees as self-controlling, achievement-driven, empowerment-seeking, and responsible.
Theory Z (by Ouchi): Characterized by long-term job security, consensual decision-making, slow evaluation and promotion procedures, and individual responsibility within a group context.
Organizational Fundamentals
Organizations commonly have goals (defined by strategic direction and objectives), structure (formal & informal map of relations to achieve goals), and people.
Organizational Design
Organizational design is a purposeful and goal-oriented process involving decisions and actions to predetermine how employees do their work.
Organizational Structure
The purpose of organizational structure is to regulate or at least reduce uncertainty, establish stable relationships and processes, and create foundations within the organization’s functions.
Organizational Chart
An organizational chart displays the activities of the organization, its subdivisions, the type of work performed, the level of management, lines of authority, degree of decentralization, staff and line functions, position status or importance, relationships, and informal organization.
Key Features of Organizations
Key features are embedded in position descriptions, pictured in position relationships, and revealed in the distribution of authority and communication channels.
Fundamentals of Organizations
Specialization: Departments, function, geographic, product & services, market or customer, process.
Coordination: Hierarchy, communication, supervision, standardization, policies, procedures & norms, committees, planning.
Specialization: Advantages and Disadvantages
Advantages: Efficiency, less time changing tasks, easier to train employees.
Disadvantages: Boredom, stress, low productivity, increased absenteeism.
Chain of Command: Advantages and Disadvantages
Advantages: Simple to understand.
Disadvantages: Lack of input, not taking advantage of technological advantages.
Span of Control
Influenced by skill & abilities, physical proximity, and standardized procedures.
Centralization vs. Decentralization: Advantages and Disadvantages
Advantages: Motivation, closer to the problem, faster reach time.
Disadvantages: Lose corporate control, silo mentality, conflict for resources.
Formalization: Advantages and Disadvantages
Advantages: Increased productivity, easier coordination.
Disadvantages: Lack of innovation, limited skill level, lower flexibility.
Management Levels
Top Management: General overview of company, strategic planning, new product lines.
Middle Management: Specific questions, programs, systems to implement strategy, tactical.
Supervisory Management: Job assignment, daily evaluation, plans to actions, contact with other employees.