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Organization and Management Theory: Goals

MOS 4470

Trevor Hunter

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MOS 4470b: Organization and Management Theory Professor: Trevor Hunter Office: FB 303 Office Hours: Wednesdays, 1:30-3:30pm Office Phone: 519-433-0041 ext. 4338 Class Times: Tuesdays,12:30-3:30pm

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Teaching Methodology

Seminar Format Lot’s of student involvement – YOU will be

running the classes Discussion on the readings as opposed to

lectures and cases Required Text: Organization Theory and

Design, Daft & Armstrong, 3rd Canadian edition

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Student Evaluation

Individual work – Organization Analysis Papers (three) – 30%

Group Research Presentation (one) – 30%

Session Leadership (one) – 30% and class contribution (ongoing) – 10%

No mid-term test or final exam – poor way to evaluate performance

Group Research Presentation - a much better way of measuring understanding

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What is an Organization?

Definition: Social entities Goal directed Designed as deliberately structured and

coordinated activity systems Linked to the external environment

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What is an Organization?

Importance of Organizations Bring together resources to achieve desired goals Produce goods and services efficiently Facilitate innovation Adapt to and influence a changing environment Create value for owners, customers and

employees Accommodate ongoing challenges of diversity,

ethics, and the motivation and coordination of employees

Analyzing Organizations

Meso-level of analysis: Relationship between the environment, the

organization and groups within the organization – NOT individuals (OB) or what the organization does (Strategic Management)

Likely a different way for you to think – it is tough to develop this skill. You need to make sure you do not get too micro-level in your analysis!

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The Evolution of Organization Theory and Design Historical Perspectives

Mainly focused on achieving efficiency Poor understand of the role of “organization”

Contemporary Organization Design The learning organization Vertical to horizontal, routine to empowerment,

formal control to shared information, rigid to adaptive

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Two Organization Design Approaches

VerticalStructure

RoutineTasks

RigidCulture

CompetitiveStrategy

FormalSystems

HorizontalStructure

AdaptiveCulture

EmpoweredRoles

CollaborativeStrategy

SharedInformation

Organizational Changein the Service of

Performance

Mechanistic System Design

Organic System Design

Stable EnvironmentEfficient Performance

Turbulent EnvironmentLearning Organization

Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change (Boston, Mass.: Harvard Business School)

EFFICIENCY EFFECTIVENESS

EVOLUTION

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Types of Organizations

Mechanistic Focus on efficiency – formalized procedures Centralization

Clear hierarchy Role/task specialization Knowledge controlled Vertical communication

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Types of Organizations

Learning Focus on effectiveness – doing what needs

to be done Organic structure

Adaptive Free-flowing information and roles Problem-solving Innovation Little hierarchy Participatory decision-making

Types of Organizations

Learning

Google Facebook Twitter Square Gore

Mechanistic

Apple BMO Heinz ImBev LHSC

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Perspectives on Organizations Systems Organizational Configuration –

Organizational Subsystems: Technical Core Technical Support Administrative Support Top Management Middle Management

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Five Basic Parts of an Organization

TopManagement

TechnicalSupport

Technical Core

AdministrativeSupport

MiddleManagement

Source: Based on Henry Mintzberg, The Structuring of Organizations (Englewood Cliffs, N. J.: Prentice-Hall, 1979) 215-297; and Henry Mintzberg, “Organization Design: Fashion or Fit?” Harvard Business Review 59 (Jan. – Feb. 1981): 103-116.

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Transformation

Process

An Open System and Its Subsystems

Environment

Raw MaterialsPeopleInformation resourcesFinancial resources

Input

SubsystemsBoundarySpanning

Production,Maintenance,Adaptation, Management

BoundarySpanning

Products andServices

Output

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Dimensions of Organization Design In order to create an organization/system

that is able to acquire, process inputs and then return the outputs to the environment, it has to be designed appropriately.

To compare organizations to see if one is designed appropriately one should compare them along two dimensions: Contextual and Structural.

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Dimensions of Organization DesignContextual Dimensions

1. Size

2. Organizational technology

3. Environment

4. Goals

5. Organizational culture

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Dimensions of Organization DesignStructural Dimensions

1. Amount of Formalization

2. Specialization

3. Hierarchy of authority

4. Centralization

5. Professionalism

6. Personnel ratios

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Dimensions of Organization DesignContext influences structure What is “right” mix for an organization’s

structure depends upon: What the environment is saying the organization

should do Why the organization was created

(Mission/Goals) What is the most important outcome –

effectiveness or efficiency

Goals and Strategy

Environment Size

Culture TechnologyStructure

1. Formalization2. Specialization3. Hierarchy of Authority4. Centralization5. Professionalism6. Personnel Ratios

Organizational and Management Theory Relates to understanding the influences of:

The context The goals The strategy The culture

on organizational structure Your job is to ask: “Given the above, is this

organizational structure the ‘right’ one to make it achieve its goals, or is there a better one? If so, what is it?”

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Top Management Responsibilities Determine the organization’s purpose Determine the organization’s goals in order to

enact and fulfill the purpose Develop strategy to achieve the goals Design the organization to enact the strategy

given the demands of: Changing and uncertain stakeholders Changing and uncertain environment

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Course Theme – Alignment of GSS

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GOALS STRATEGY STRUCTURE

•What are the organization’s goals?

•Are the goals appropriate given the context?

•Implications/ Recommendation

•What is the organization’s strategy?

•Is the strategy appropriate given the organization’s goals?

•Will the strategy achieve the goals?

•Implications/ Recommendation

•What is the organization’s structure?•Will the structure allow the strategy to be undertaken appropriately?•Implications/ Recommendation

OK? – next level OK? – next level

Analyze Analyze AnalyzeOK?

Environment/Goals/Strategy/Structure Analysis Process

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ExternalEnvironmentalAssessment

InternalEnvironmentalAssessment

2. Goals 3. Strategy 4. Structure

6. Outcome Assessment – have you been successful?

Learning orEfficiency

Learning orEfficiency

1. Tells you what you should do

5. Outcome

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Selecting Strategy and Structure to Achieve Organizational Goals1. Goals Where you want to go

2. Strategy How you are going to get there. A plan for interacting with the competitive environment to achieve organizational goals.

3. Structure How you can do what you need to do to implement strategy and achieve goals

Environment Goals Strategy Structure

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Analyzing Environment, Goals, Strategy and Structure1. The type of environment determines the right type of goals

2. The type of goals determine the right type of strategy

3. The type of strategy determines the type of organizational structure

Your job is to identify each of the right type and why, to get alignment

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Organizational Purpose - Goals Mission

Organization’s reason for existence Describes the vision, shared values and beliefs Sometimes referred to as Official Goals or

Mission Statement – formally stated definition of business scope and outcomes the organization is trying to achieve

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Organizational Purpose - Goals Mission

Communicates to current and prospective stakeholders what the organization stands for and what it is trying to achieve.

Communicates legitimacy to society – organizations are social entities which need to be deemed legitimate

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Organizational Purpose -Goals Mission

King’s Mission Statement:

King's is a Catholic University College committed to the ongoing creation of a vital academic community animated by a Christian love of learning and the pursuit of truth. The College strives to foster an environment based on open inquiry, Christian values and service to the larger community.

Organizational Purpose - Goals Mission

King’s MOS Mission: It is the King’s University College MOS group’s

mission to develop globally minded graduates who are good at business and do good, through business.

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Organizational Purpose - Goals Operative Goals

Designate the ends sought through operating procedures and explain what it is the organization actually does – subsystem activities

Specific and measurable – need to be achieved in order for organization to survive

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Organizational Purpose - Goals Operative Goals - Types Overall Performance:

For-profit: Profits, sales, growth, output etc. Not-for-profit: fulfillment of services, cost control etc.

Resource Aquisition: Acquisition of needed material and finances from the

environment Market:

Market share or growth – responsibility of marketing department

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Organizational Purpose - Goals Operative Goals - Types Innovation and Change:

Ability to be internally flexible and adaptable with respect to the external environment

Productivity: Concerns about the amount of output achieved from

available resources (i.e. cost/unit) Employee Development:

Training, promotion, safety etc. of employees – development of internal resources

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Organizational Purpose - Goals The Importance of Goals

Official Goals: Describe the value system for the organization and

should guide all strategies and operations Legitimize the organization

Operative Goals: Represent the primary tasks (rather than objectives) of

the organization More explicit and well defined

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Goal Type and Purpose

Type of Goals Purpose of Goals

Official Goals, mission: Legitimacy

Operative goals: Employee direction and motivationDecision guidelinesStandard of performance