robbins 5e_ch06.ppt
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Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia
PowerPoint to accom pany
Stephen Robbins
Neil Barnwell
Organisation TheoryCONCEPTS AND CASES
5e
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Robbins, Barnwell: Organisation Theory 5e © 2007 Pearson Education Australia
Chapter six
Organisation size
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Aims of this lecture
Define organisation size
Summarise the main studies in linking size and
structure
Discuss the management challenges presented by
large, and small, size
Examine downsizing
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Size
Organisation size is normally measured by the
number of employees
Other measures may include geographic spread,turnover or market capitalisation
For organisation theory purposes, an organisation
may be considered large if it has over 2000
members
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Sizecontinued:
Blau and Shoenherr advocated that as size
increases, structural differentiation also increases
but at a decreasing rate
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Sizecontinued:
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Sizecontinued:
The Aston group found that size was associated
with greater specialisation and formalisation
Critics claim these studies have:• Poor methodology
• Sampling difficulties
• Problems with generalisation
It is also difficult to separate size from the effects of
technology and strategy
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Summarising the effects of size
Complexity increases as size increases, but at a
decreasing rate
Size generates differentiation, and differentiationmay also contribute to size
As an organisation increases in size, some
activities, i.e. day to day decision making, are
centralised
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Large size
Large size magnifies management challenges
Problems experienced are:
• Growth of bureaucracy• Turning information into knowledge
• Adapting to changing technologies
• Extended timeframes for action
•
Need for accurate costing information• Managing over a wide geographic spread
• Bounded rationality and difficulties
in decision making
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Large sizecontinued:
The structural contribution to these problems may
include:
• Divisionalisation
•
Outsourcing• Balancing centralisation/decentralisation
• Structuring to facilitate change
• Ensuring all tasks have someone responsible for them
• Physically separating the different types of work
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Small size
Organisation theory has a contribution to make to
the structuring of small business
The owner/manager has a major influence upon the
way that small business is structured and managed
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Small sizecontinued:
In a small business, work:
• Tends to have a broader scope
• There are fewer layers of management• Decision making is centralised
• There is less geographic dispersion
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Downsizing
Downsizing is the planned reduction of positionswithin an organisation
The reasons for downsizing include• Increased competition
• Computerisation and automation
• Changes in strategy
• Erosion of economies of scale
• Rise in outsourcing• Declining profitability
• Structural changes
• Changing roles of middlemanagement
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Downsizingcontinued:
The claimed benefits of downsizing include
• Lower overhead costs
• Less bureaucracy
• Faster decision making• Smoother communication
• Greater entrepreneurship
• Increased productivity
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Downsizingcontinued:
Ineffective downsizing practices can have a long
lasting negative effect upon the organisation
including
•
Lowered morale• Skills shortages
• Productivity losses
• Loss of rapport between managers and workers
• Loss of corporate memory and organisational learning
deficits
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Discussion questions
What structural and management differences would
you expect to find in a large organisation, which
you would not find in a small one?
Compare and contrast working in a largeorganisation with working in a small one.
Discuss the challenges of managing a large
organisation, such as Shell, Nestle or Toyota.
Identify poor downsizing practices and discuss the
effect that these can have upon
an organisation.