Summary: Organisational Theory

Read the summary and the most important questions on Organisational theory

• 1 An overview

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• two forces that characterise systems

  1. differentiation
  2. integration 

• Life cycle of an organisation

  1. Entrepreneurial stage
  2. Collectivity stage 
  3. formalisation-and-control stage
  4. elaboration-of-structure stage
  5. decline stage

• 2 The evolution of organisation theory

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• Division of labour (18th century)

  Functional specialisation: the breaking down of tasks into simple components, which can be undertaken on a repetitive bars by specialists.

• 2 underlying dimensions in the evolution of organisation theory

  1. organisations are systems
  2. The ends of organisation structure
  - rational perspective: effectively achieving objectives
  - social perspective; result of conflicting interests of organisations participants

• Which other industrial innovations developed in the 19th century?

  - mass production -> modern industrial structure, arranged line and staff management
  - railways -> timetables, schedules, clear line of authority and workforce culture

• 2 different approaches to study organisations (1950-1970)

  1. populist approaches; humour and mockery to draw attention
  2. academic approach; specific underlying themes which lack general appeal and require more knowledge to interpet

• 5 popular management writers

  1. Tom Peters; organisations need to improve communications, become more innovative and respond to environmental changes quicker.
  2. Charles Handy; Stress innovation and flexibility and adds the human side of people liking to work
  3. Ricardo Semler; Decision-making tasks may be undertaken at a lower level
  4. Michael Hammer; re-engineering suggests to build the organisation structure around multidisciplinary processes -> self-contained tasks
  5. Jack Welch; reducing number of layers and employees, decentralised decision-making, quality of management is most valuable asset

• 4 Organisation Structure Dimensions

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• 5 basic configurations of organisations (mintzberg)

  1. simple structure; highly centralised, low formalisation
  2. machine bureaucracy; formalisation, standardisation of processes and practises
  3. divisional structure: decentralised, product diversity and spatial dispersion
  4. professional bureaucracy: high formalisation and decentralisation
  5. adhocracy; high levels of coordination, low formalisation

• 5 Strategy

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• Two approaches as how to an organisation determines its strategy

  1. planing mode: strategy as outcome of a rational deliberation process
  2. evolutionary mode: strategy as emerging from minor incremental decisions 

• 4 category strategy-structure typology (Miles and Snow)

  1. Defenders; organisations whose strategy is to produce a limited set of products directed at a narrow segment of the total potential market (aggressive pricing)
  2. Prospectors; organisations whose strategy is to find and exploit new product and market opportunities. (innovation)
  3. Analysers; organisations whose strategy is to move into new products or markets only after their viability has been proven (minimise risks)
  4. Reactors; a residual strategy that describes organisations that follow inconsistent and unstable patterns.