Organization Theory and

• / 4

Organization Theory and Design Chapter 1 Organization Theory is a theory how and why organizations are designed the way that they are, who creates and authorizes the design and may also explore alternative designs.

What are organizations:

•Social entity > an organisation is made of people.•Goals > and the process of completing these goals.•Designed as deliberately structured and coordinated activity systems.•Linked to an external environment.•Not static but dynamic A good organizational theory isn’t the only thing which makes an company successful.

Zald and Hasenfeld: The wrote ‘a theoretical framework’. Which

describes the political economy of organizations.

•Polity/political system of an organization:

The constitution/ fundamental norms, of the organization and the system of authority, power, and influence.

•Economy/ economic structures and processes of the organization:

The system for processing and transforming raw materials into the goods and services that the organization produces.

Organizations have to deal with challenges:

•Globalization:

With new technology and communications people all around the world can more easily exert influence in organizations. Markets, technologies and organizations are becoming increasingly interconnected.

•Ethics and Social Responsibility:

Organizations have to maintain high standards. For companies it’s becoming increasingly important to become ecological sustainable and they have a social responsibility of don’t get involved with financial scandals.

•Responsiveness:

Organizations have to respond very quickly to environmental changes, organizational crises and shifting customer expectations.The financial basis of today’s economy is information. Intangible assets become more important than tangible assets. Knowledge and investments become more important than tangible assets.

•The Digital Workplace:

Organizations have to keep up with today’s technology-driven workplace. Organizations have been flooded by information technology that affects how they are designed and managed.

•Diversity:

In today’s organizations there is more diversity in employees (age, gender, ethic). This brings a variety of challenges and the 2 / 4

accepting of diversity.

1 3 / 4

Organizations can be; multinational corporations, family owned business, service providers, banking, medical services, for-profit/non- profit.The main difference between for-profit and non-profit organizations is that the activities of managers in for-profit organizations are directed primarily at producing goods and services in a way that retains the confidence of shareholders. Managers in non-profits do not face this particular constraint.

Other differences:

•Difficulty of securing funding or raising capital.•Competing with profit-making businesses.•The distinctive characteristics of non-profit organizations.The importance of organizations •They bring together resources to generate wealth from the production of goods and services purchased by customers. (To desire their goals and outcomes).•They produce goods and services.•They facilitate innovation •They harness modern manufacturing, service and information technologies •They adapt to and influence a changing environment •They create value •They accommodate ongoing challenges of diversity, ethics and the motivation and coordination of employees.Chapter 2

Different perspective on organizations:

2 A macro approach to organizations that analyses the whole organization as a unit.Organization Theory

• / 4