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Management
, Ninth Edition
Robert Kreitner, Arizona State University
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| | Chapter Summaries
Chapter 9:
Organizations
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Organizations need to be understood and intelligently managed because they are an ever-present feature of modern life. Whatever their purpose, all organizations have four characteristics: (1) coordination of effort, (2) common goal or purpose, (3) division of labor, and (4) hierarchy of authority. If even one of these characteristics is absent, an organization does not exist. One useful way of classifying organizations is by their intended purpose. Organizations can be classified as business, nonprofit service, mutual-benefit, or commonweal.
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Organization charts are helpful visual aids for managers. Representing the organizations structural skeleton, organization charts delineate vertical hierarchy and horizontal specialization. Vertical hierarchy is the so-called chain of command. Horizontal specialization involves the division of labor.
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There are both traditional and modern views of organizations. Traditionalists such as Fayol, Taylor, and Weber subscribed to closed-system thinking and ignored the impact of environmental forces. Modern organization theorists tend to prefer open-system thinking because it realistically incorporates organizations environmental dependency. Early management writers proposed tightly controlled authoritarian organizations. Max Weber, a German sociologist, applied the label bureaucracy to his formula for the most rationally efficient type of organization. When bureaucratic characteristics, which are present in all organizations, are carried to an extreme, efficiency gives way to inefficiency. Chester I. Barnards acceptance theory of authority and growing environmental complexity and uncertainty questioned traditional organization theory.
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Open-system thinking became a promising alternative because it was useful in explaining the necessity of creating flexible and adaptable rather than rigid organizations. Although the analogy between natural systems and human social systems (organizations) is imperfect, there are important parallels. Organizations, like all open systems, are unique because of their (1) interaction with the environment, (2) synergy, (3) dynamic equilibrium, and (4) equifinality. In open-system terms, business organizations are made up of interdependent technical, boundary-spanning, and managerial subsystems.
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Harvards David A. Garvin characterizes learning organizations as those capable of turning new ideas into improved performance. Five skills required to do this are (1) solving problems, (2) experimenting, (3) learning from organizational experience and history, (4) learning from others, and (5) transferring and implementing knowledge for improved performance.
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Because there is no one criterion for organizational effectiveness, for-profit as well as nonprofit organizations need to satisfy different effectiveness criteria in the near, intermediate, and distant future. Effective organizations are effective, efficient, and satisfying in the near term. They are adaptive and developing in the intermediate term. Ultimately, in the long term, effective organizations survive.
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The management of organizational decline has only recently received the attention it deserves. Decline is often attributable to managerial complacency. The characteristics of decline are interlocking dilemmas that foster organizational self-destruction. To avoid decline as much as possible, or at least lessen its frequency, organizations should adopt preventive safeguards that counteract complacency. Continuous improvement is the primary tool for fighting decline. Downsizing tends to yield disappointing results. Among the ethical alternatives to layoffs are redeployment and work sharing.
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Organizational culture is the social glue binding people together through shared symbols, language, stories, and practices. Organizational cultures can commonly be characterized as collective, emotionally charged, historically based, inherently symbolic, dynamic, and inherently fuzzy (or ambiguous). Diverse outsiders are transformed into accepted insiders through the process of organizational socialization. Orientations and stories are powerful and lasting socialization techniques. Systematic observation can reveal symptoms of a weak organizational culture.
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