Organization Theory

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1.General characteristic of an organization.

The concept of "organization" is derived from the Greek word "Organon" which
means an instrument or tool. An organization has the following characteristics-
1. It is an open system. 2. It is a goal oriented. 3. It is a collection of people 4.
Organization consists of people. 5. Organization consists of technology, and 6.
It has continuity.
2.Communication Channels.
Communication channels are the means through which people in an
organization communicate. Communication channels include face-to-face
communication, broadcast media, mobile channels, electronic
communication and written communication.
Face-to-face communication - This is the best channel to use for complex or
emotionally charged messages, because it allows for interaction between
speaker and recipients to clarify ambiguity.
Broadcast Media Communications - These types of media should be used when
addressing a mass audience.
Mobile Communications Channels - A mobile communication channel should
be used when a private or more complex message needs to be relayed to an
individual or small group.
Electronic Communications Channels - This channel can be used for one-on-
one, group or mass communication. It is a less personal method of
communication but more efficient.
Written Methods of Communication - Written communication should be used
when a message that does not require interaction needs to be communicated to
an employee or group.
3.Types of Cultures
Constructive – valuing members, self – actualizing, affiliative and
humanistic/encouraging normative beliefs (expected behavior or conduct)
Passive – defensive – approval – oriented, traditional and bureaucratic,
dependent and nonparticipative, punish mistakes but ignore success
Aggressive – defensive – confrontation and negativism are rewarded,
nonparticipative, positional power, winning valued, competitiveness rewarded,
perfectionistic.

4.The essence, the basic concepts and principles of the organization


Organization - a social entity with defined borders that is deliberately
coordinated and is functioning in a relatively simple way to achieve its goals.
Organization is a group of people whose activity is deliberately coordinated to
reach the general goal or goals.
To be an organization, this group should meet the following requirements:
• - the presence of at least two people who consider themselves a part of the
group; • - the presence of at least one common goal;
• - the presence of group members who deliberately work together to achieve a
significant for all goal.
Organizations exist to do the following.
• Bring together resources to achieve desired goals and outcomes;
• Produce goods and services efficiently.
• Facilitate innovation;
• Use modern manufacturing and information technologies.
• 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.
Organization as a system consists of the following: • integrity; • divisibility.
The organization as a process is a manifestation of social activity that has
emerged from the social division of labor.The definition of an organization
requires the need for formal coordination of the interaction of
employees.Another key element is a mission. A mission is an idea that gives the
meaning to work and makes employees more focused.Another important
element of an organization is hierarchy.
• І. Principle of purpose
• ІІ. Principle of form
• ІІІ. Principle of contents
• ІV. Principle of relationship.
• V. Principle of interaction
5.Internal environment of the organizational system
Environment is a set of objects, whose change affects the system, and those
objects whose properties change as a result of system behavior.
The internal environment of the organization - it's what is inside the
organization.
Internal environment of organization includes:
•Staff;
•Material and technical basis;
•Finances;
•Organizational structure;
•Technology;
•Management system;
•Values, ideas and team spirit – organizational culture;
•Mechanisms of interaction with external environment.
6. Barriers of communication

● Language Barrier– the language used by the sender may not be


understood by the receiver. Also, the two-people communicating may
speak the same language but the jargon used to pass the information
may breakdown communication if the receiver doesn’t fully
understand it.
● Emotional Barriers– the state of mind of the communicators can
hinder the delivery of information. If the receiver is having issues they
are likely to be less attentive, which could lead to poor
communication. The mental state of the sender and receiver influences
how the message is received, perceived and sent.
● Physical Barriers– the environment one is in determines how good
communication is. If a receiver of a message is in a noisy place he is
unlikely to hear what message is being conveyed. Vice versa if an
encoder at a musical concert he cannot pass information clearly.
Geographical distance also is a barrier to communication. Generally,
communication is faster over a short distance as many communication
channels are available and less technology is required. If you are to
send a message to a person in Antarctica this may prove difficult as
mobile communication is unavailable or poor. Face to face
communication is best as both are in the same place.
● Systematic Barriers- In an organization communication may be
barred because they are no channels to communicate amongst
themselves. For example, a junior employee may not be able to access
the company CEO because no measures have been put in place to
allow for that. Systematic barriers exist in organizations with
inefficient communication channels.
● Taboos– communication may be hinder because some topics are not
open to discussion. Taboo topics may include, religion, sexuality, and
sex, politics, disabilities, etc.
7.Principles of an organization.
Principle of purpose
Principle of form
Principle of contents
Principle of relationship.
Principle of interaction.
Principles by Peter Ducker :
1. The organization should be transparent. Employees must know and
understand the structure of the institution in which they work.
2. The organization must have a person taking the final decision in its field of
expertise.
3. There must be someone who takes the lead during the crisis.
4. The amount of power must be comparable with the amount of responsibility.
5. Each employee should have only one "master“ (manager, boss). There was a
saying in Ancient Rome: “a servant who has 3 masters is no longer a slave, but
a free man”.
6. The number of hierarchy levels should be minimal; in other words, the
organization should be as "flat“ as possible - according to the information
theory, each additional link creates obstacles and reduces the value of the
message.
8. Models of decision making
Model # 1. Rational Model:
According to the rational model, managers engage in a decision-making process
which is totally rational. They have all the relevant information needed to take
decisions. They are also aware of different possible alternatives, outcomes and
ramifications, and hence make rational decisions.
Model # 2. Non-Rational Models:

Unlike the rational view, several non-rational models of managerial decision-


making suggest that it is difficult for managers to make optimal decisions due to
the limitations of information-gathering and processing. Within the non-rational
framework, three major models of decision-making have been identified by
researchers (Satisficing model,Incremental model, and garbage can model).
Model # 3. Satisficing Model:
In the 1950s, an economist, Herbert Simon studied the actual behaviors of
managerial decision makers. On the basis of his studies, Simon propounded the
concept of bounded rationality. This concept suggests that the managers may
not always be perfectly rational in making decisions.
Their decision-making ability may be limited by certain factors like cognitive
capacity and time constraints. The concept of bounded rationality was offered as
a framework to facilitate better understanding of the actual process of
managerial decision-making.
Model # 4. Incremental Model:
The manager here is concerned more with finding a short-term solution to the
problem than making a decision that will facilitate the attainment of goals in the
long-term. The incremental model does not require managers to process a great
deal of information in order to take a decision.
Model # 5. Garbage-Can Model:
The garbage-can approach to decision-making holds that managers behave
randomly while making non-programme
9. Organizational socialization
Phase 1:Anticipatory - learning that occurs prior to joining the organization.
Phase 2:Encounter - encounter values, skills, and attitudes start to shift as new
recruit discovers what the organization is truly like.
Phase 3:Change and acquisition - Change and acquisition recruit masters
skills and roles and adjusts to work group’s values and norms.
10.Organization as a managerial function
An organization is a function of management within which the distribution of
work between individual employees and their groups and the coordination of
their activities are carried out. The implementation of the functions is performed
during the organizational activities.
Organizational activities is a process by which a manager eliminates
uncertainty, disorder, confusion and conflict among people concerning their
work or authority and creates an environment suitable for their common
activities.
The main components of organizational processes (organizational activities)
are:
• division of labor - distribution of the total work into separate
components, sufficient for the individual employee according to his
qualifications and abilities;
• grouping of operations and activities in certain blocks (groups,
departments, offices, sectors etc.) - departamentization;
• subordination of each group to a leader who receives the necessary
authority (delegation of powers);
• determining the number of employees directly subordinated to the given
manager (setting the range of control);
• providing vertical and horizontal coordination of works and activities
(creating mechanisms of coordination).
11.External environment of the organizational system
External environment of the organization - a set of variables that are outside the
organization and are not the direct sphere of influence of its management.The
external environment of an organization includes subjects of interaction and
factors.
Subjects of interaction
•Clients;
•Investors;
•Partners;
•Suppliers;
•Government
Factors
•Political;
•Economical;
•Social;
•Technological;
•Geographical;
•Market factors

12. New forms of organizational structures


Matrix Organizations
Matrix organizations cross a traditional functional structure with a
product structure. Specifically, employees reporting to department
managers are also pooled together to form project or product teams. As a
result, each person reports to a department manager as well as a project or
product manager. In this structure, product managers have control and say
over product-related matters.
Boundaryless organization
Boundaryless organization is a term coined by Jack Welch of General
Electric Company and refers to an organization that eliminates traditional
barriers between departments, as well as barriers between the
organization and the external environment. Many different types of
boundaryless organizations exist. One form is the modular organization
where all the nonessential functions are outsourced.
Strategic alliances constitute another form of boundaryless design. Here,
similar to a joint venture, two or more companies find an area of
collaboration and combine their efforts to create a partnership that is
beneficial for both parties. In this form, the traditional boundaries
between two competitors may be broken.
Learning Organizations
A learning organization is one where acquiring knowledge and changing
behavior as a result of the newly gained knowledge are part of an
organization’s design. In these structures, experimenting, learning new
things, and reflecting on new knowledge are the norms. At the same time,
there are many procedures and systems in place that facilitate learning at
the organizational level.
Virtual organizations
A virtual organization is an organization involving detached and
disseminated entities (from employees to entire enterprises) and requiring
information technology to support their work and communication.
Virtual organizations do not represent a firm’s attribute but can be
considered as a different organizational form.
13.Organization as a system
Organization as a system consists of the following:
• integrity;
• divisibility.
A system means a set of objects with a set of relationships between them
and between their properties.
The main elements of a system
•Objects are parts or system components.
•Properties allow quantitatively describe the object, expressing it in units
that have a certain dimension.
•Communication (relationship) - that's what connects objects and
properties together.
Organization as an open system
The features of an organization as an open system:
•a presence of components;
•a presence of connections (links);
•a presence of structure;
•a presence of interaction;
•a course of processes;
•integrity (holism);
•ability to identification;
•a presence of internal and external environment;
•a presence of concept (conceptualism).

14.Levels of organizational culture


Artifacts - symbols of the culture in the physical and social work
environment.
Values - Espoused : what members of an organization say they value.
Enacted : reflected in the way individuals actually behave.
Assumptions - deeply held beliefs that guide behavior and tell members
of an organization how to perceive and think about things.
15.Steps of decision making
The business decision-making process is a step-by-step process allowing
professionals to solve problems by weighing evidence, examining
alternatives, and choosing a path from there. This defined process also
provides an opportunity, at the end, to review whether the decision was
the right one.
1. Identify the decision
2. Gather relevant information
3. Identify the alternatives
4. Weigh the evidence
5. Choose among alternatives
6. Take action
7. Review your decision

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