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Describe the four characteristics common to all organizations.

Designing Effective Organizations. Learning Objectives. Describe the four characteristics common to all organizations. Explain the difference between closed and open systems, and contrast the military/mechanical, biological, and cognitive systems metaphors for organizations.

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Describe the four characteristics common to all organizations.

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  1. Designing Effective Organizations Learning Objectives • Describe the four characteristics common to all organizations. • Explain the difference between closed and open systems, and contrast the military/mechanical, biological, and cognitive systems metaphors for organizations. • Describe the four generic organizational effectiveness criteria. • Explain what the contingency approach to organizational design involves. • Discuss Burns and Stalker’s findings regarding mechanistic and organic organizations. • Describe new-style and old-style organizations, and list the keys to managing geographically-dispersed employees in virtual organizations. Chapter Fifteen

  2. What is an Organization? 15-1 • Organization: system of consciously coordinated activities of two or more people. • Unity of command principle: each employee should report to a single manager. • Organization chart: boxes-and-lines illustration showing chain of formal authority and division of labor. © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  3. Sample Organization Chart for a Hospital 15-2 Figure 15-1 Board of Directors StrategicPlanningAdvisor LegalCounsel Chief ExecutiveOfficer Cost-ContainmentStaff President ExecutiveAdministrativeDirector ExecutiveMedicalDirector © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  4. Sample Organization Chart for a Hospital (Cont.) 15-3 Figure 15-1 ExecutiveAdministrativeStaff ExecutiveMedicalDirector Dir.OfHumanResources Dir.OfPatient& PublicRelations Dir.OfNutrition& FoodServices Dir.X-Ray &LabServices Dir.OfOut-PatientServices ChiefPhysician Dir.OfAdmissions Dir.OfAccounting Dir.OfSurgery Dir.OfPharmacy © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  5. Span of Control 15-4 • Span of control: the number of people reporting directly to a given manager. • Staff personnel: provide research, advice, and recommendations to line managers. • Line Managers: have authority to make organizational decisions. © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  6. Closed System:“A self-sufficient entity, closed to the surrounding environment.” (For example, a battery-powered clock.) Open system:“Depends on constant interaction with the surrounding environment for survival.” (For example, the human body.) Needed: Open-System Thinking 15-5 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  7. Organizations as Military/Mechanical Bureaucracies 15-6 • Bureaucracy: Max Weber’s idea of the most rationally efficient form of organization. • Weber’s Bureaucracy: four factors should make bureaucracies the epitome of efficiency • Division of labor • A hierarchy of authority • A framework of rules • Administrative personality © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  8. The Organization as an Open System: The Biological Metaphor 15-7 Figure 15-2 Goals and Values Subsystem Technical Subsystems Inputs Outputs Managerial Subsystem Psychological Subsystem Structural Subsystem Feedback © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  9. Generic Effectiveness Criteria 15-8 • “No single approach to the evaluation of effectiveness is appropriate to all circumstances or for all organization types.” • Goal accomplishment • Resource acquisition • Internal processes • Strategic constituencies satisfaction • Strategic constituency: any group of people with a stake in the organization’s operation or success. © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  10. Goal Accomplishment Resource Acquisition Internal Processes Strategic Constituencies Satisfaction Four Dimensions of Organizational Effectiveness 15-9 Figure 15-3 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  11. The Contingency Approach to Designing Organizations 15-10 • Contingency approach to organization design: creating an effective organization-environment fit. © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  12. Mechanistic versus Organic Organizations 15-11 • Mechanistic organizations: “Rigid bureaucracies with strict rules, narrowly defined tasks, and top-down communication.” (Tend toward centralized decision-making.) • Organic organizations:“Flexible networks of multitalented individuals who perform a variety of tasks.” (Tend toward decentralized decision making.) © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  13. New Old Dynamics learning Stable Information rich Information is scarce Global Local Small and large Large Product/customer oriented Functional Skills oriented Job oriented Team oriented Individual oriented Involvement oriented Command/control oriented Lateral/networked Hierarchical Customer oriented Job requirements oriented New-Style versus Old-Style Organizations 15-12 Table 15-1 © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

  14. Skills & Best Practices: How to Manage Globally-Dispersed Employees 15-13 • The three keys are: sharing knowledge, building trust, and maintaining connectedness • Other steps include: • Hire carefully • Communicate regularly • Practice “management by walking around” • Conduct regular audits • Use technology as a tool, not a weapon • Achieve a workable balance between online and live training © 2006 The McGraw-Hill Companies, Inc. All rights reserved. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill McGraw-Hill/Irwin

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