Organizations and Their Strategies: Context for Behavior

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Organizations and Their Strategies Context for
Behavior

• MGT 5371-001
• Managing Organizational Behavior Design
• May 5-30-07
• John D. Blair, PhD
• Georgie G. William B. Snyder Professor in
  Management

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Key Questions

• What is strategy and how is it linked to
  different types of organizational goals?
• What are the basic attributes of organizations?
• How is work organized and coordinated?

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What is strategy and how is it linked to
different types of organizational goals?

• Strategy.
• The process of positioning the organization in
  the competitive environment and implementing
  actions to compete successfully.
• A pattern in a stream of decisions.
• Choices regarding goals and the way the firm
  organizes to accomplish them.

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Elements of conventional strategy decisions

• Choosing the types of contributions the firm
  intends to make to society.
• Precisely whom the firm will serve.
• Exactly what the firm will provide to others. 

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What strategy will achieve this vision?
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Societal goals

• Reflect an organizations intended contributions
  to the broader society.
• Enable organizations to gain legitimacy, a social
  right to operate, and more discretion for their
  non-societal goals and operating practices.
• Enable organizations to make legitimate claims
  over resources, individuals, markets, and
  products.

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Societal contributions and mission statements

• A firms societal contribution is often part of
  its mission statement.
• A written statement of organizational purpose. 
• A good mission statement identifies whom the firm
  will serve and how it will go about accomplishing
  its societal purpose.
• Mission statements by Dilbert

• A firms societal contribution is often part of
  its mission statement.
• A written statement of organizational purpose. 
• A good mission statement identifies whom the firm
  will serve and how it will go about accomplishing
  its societal purpose.
• Mission statements by Dilbert

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Output goals

• Define the type of business the organization is
  pursuing.
• Provide some substance to the more general
  aspects of mission statements.

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Systems goals

• Concerned with the conditions within the
  organization that are expected to increase the
  organizations survival potential.
• Typical systems goals include growth,
  productivity, stability, harmony, flexibility,
  prestige, and human resource maintenance.
• Systems goals must often be balanced against one
  another.

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Well-defined systems goals can

• Focus managers attention on what needs to be
  done.
• Provide flexibility in devising ways to meet
  important targets.
• Be used to balance the demands, constraints, and
  opportunities facing the firm.
• Form a basis for dividing the work of the firm.

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Formal structures of organizations

• Successful organizations develop a structure
  consistent with the pattern of goals established
  by senior management.
• The formal structure shows the planned
  configuration of positions, job duties, and the
  lines of authority among different parts of the
  organization.
• The formal structure of the firm is also known as
  the division of labor.

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Vertical specialization

• A hierarchical division of labor that distributes
  formal authority and establishes where and how
  critical decisions are to be made.
• Creates a hierarchy of authority.
• An arrangement of work positions in order of
  increasing authority.
• Organization charts are diagrams that depict the
  formal structures of organizations.

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Partial formal structure shown in organizational
chart
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Command and Control

• Chain of command.
• A listing of who reports to whom up and down the
  organization.
• Unity of command.
• Each person has only one boss and each unit one
  leader.
• Span of control.
• The number individuals reporting to a supervisor.

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Staff versus Line Units

• Line units.
• Work groups that conduct the major business of
  the organization.
• Staff units.
• Work groups that assist the line units by
  providing specialized expertise and services to
  the organization.

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Internal versus external units

• Internal line units.
• Transform raw materials and information into
  products and services.
• External line units.
• Maintain outside linkages.
• Internal staff units.
• Assist the line units in performing their
  functions.
• External staff units.
• Assist the line units with outside linkages and
  act to buffer internal operations.

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Multiple Types and Functions of Staff Units
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Other basic attributes of organizations

• Some firms are outsourcing many of their staff
  functions.
• Use of information technology to streamline
  operations and reduce staff.
• Most organizations use a variety of means to
  specialize the vertical division of labor.
• Best pattern of vertical specialization depends
  on environment, size, technology, and goals.

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Controlling the organization and its people

• The set of mechanisms used to keep actions or
  outputs within predetermined limits.
• Deals with
• Setting standards.
• Measuring results against standards.
• Instituting corrective action.

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How is work coordinated?

• The set of mechanisms that an organization uses
  to link the actions of its units into a
  consistent pattern.
• Within a unit, much of the coordination is
  handled by its manager.
• Smaller organizations rely on management
  hierarchy for coordination.
• As the organization grows, more efficient and
  effective methods of coordination are required.

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Personal methods of coordination

• Produce synergy by promoting dialogue,
  discussion, innovation, creativity, and learning,
  both within and across units.
• Common personal methods of coordination are
  direct contact between and among organizational
  members and committee memberships.
• Mix of personal coordination methods should be
  tailored to subordinates, skills, abilities, and
  experiences.

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Impersonal methods of coordination

• Produce synergy by stressing consistency and
  standardization so that individual pieces fit
  together.
• Often are refinements and extensions of process
  controls.
• Historical use of specialized departments to
  coordinate across units.
• Contemporary use of matrix departmentation and
  management information systems for coordination.

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Bureaucracy as very formal coordinationgood and
bad

• An ideal (conceptually pure) form of
  organization, the characteristics of which were
  defined by the German sociologist Max Weber.
• Relies on a division of labor, hierarchical
  control, promotion by merit with career
  opportunities for employees, and administration
  by rule.

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Mechanistic type of bureaucracy (machine
bureaucracy)

• Emphasizes vertical specialization and control.
• Stresses rules, policies, and procedures
  specifies techniques for decision making and use
  well-documented control systems.
• Often used with a low cost leader strategy.

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Benefits and limitations of traditional
mechanistic bureaucracy

• Benefits of the mechanistic type.
• Efficiency.
• Limitations of the mechanistic type.
• Employees dislike rigid designs, which makes work
  motivation problematic.
• Unions may further solidify rigid designs.
• Key employees may leave.
• Hinders organizations capacity to adjust to
  subtle environmental changes or new technologies.