Organizational Theory, Design And Change: Chapter 1

Front 1

Organization:

Back 1

a tool used by people to coordinate their actions to obtain something they desire or value.

Front 2

Entrepreneurship:

Back 2

the process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs.

Front 3

How does an organization create value (value creation model)?

Back 3

By taking inputs (raw materials, capital) from the environment and converting them (with machinery or human skills/abilities) into outputs (goods and services).

Front 4

Why do organizations exist?

Back 4

Because people working together to produce goods and services usually can create more value than people working separately.

Front 5

What are the five reasons why an organization, as opposed to an individual, increases the value of outputs?

Back 5

1. increase specialization and division of labor
2. use large-scale technology (economies of scale & economies of scope)
3. manage the external environment
4. economize on transaction costs
5. exert power and control (use employment, promotion and rewards to make people do what is best for the organization)

Front 6

Economies of scale:

Back 6

cost savings that result when goods and services are produced in large volume on automated production lines.

Front 7

Economies of scope:

Back 7

cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across different products.

Front 8

Transaction costs:

Back 8

the costs associated with negotiating, monitoring, and governing exchanges between people.

Front 9

Organizational theory:

Back 9

the study of how organizations function and how they affect and are affected by the environment in which they operate.

Front 10

Organizational structure:

Back 10

the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals.

Front 11

Organizational culture:

Back 11

the set of shared values and norms that controls organizational members' interactions with each other and with suppliers, customers, and other people outside the organization.

Front 12

Organizational design:

Back 12

the process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve its goals.

Front 13

Organizational change:

Back 13

the process by which organizations redesign their structures and cultures to move from their present state to some desired future state to increase their effectiveness.

Front 14

contingency:

Back 14

an event that might occur and must be planned for. Examples: changing technology, expanding global presence

Front 15

strategy:

Back 15

the specific pattern of decisions and actions that managers take to use core competencies to achieve a competitive advantage and outperform competitors. It should be always changing in response to changes in the environment to stay ahead of competition.

Front 16

Organizational design and change have important implications for a company's ability to deal with:

Back 16

1. contingencies
2. achieve a competitive advantage
3. effectively manage diversity
4. increase efficiency, speed and innovation

Front 17

What are the three ways to measure organizational effectiveness?

Back 17

1. external resource approach
2. internal systems approach
3. technical approach

Front 18

What is the external resource approach?

Back 18

A method managers use to evaluate how effectively an organization manages and controls its external environment. Indicators include stock price, profitability and return on investment. Also being the first to take advantage of a new opportunity.

Front 19

What is the internal systems approach?

Back 19

A method that allows managers to evaluate how effectively an organization functions and operates. Measures include length of time needed to make a decision, time needed to get new products out, and time spent coordinating activities of different departments.

Front 20

What is the technical approach?

Back 20

A method managers use to evaluate how efficiently an organization can convert some fixed amount of organizational resources into finished goods and services. Measured in terms of productivity and efficiency (the ratio of outputs to inputs).

Front 21

What is the difference between official goals and operative goals?

Back 21

Official goals are guiding principles that the organization formally states in its annual reports and in other public documents.

Operative goals are specific long-term and short-term goals that guide managers and employees as they perform the work of the organization.

Managers must develop goals that measure effectiveness on control, innovation and efficiency and must be careful to align office and operative goals to eliminate conflict between them.