Organizational Theory and Designs Essay

3743 Words Apr 27th, 2010 15 Pages
CHAPTER 1: ORGANIZATIONS AND ORGANIZATIONAL EFFECTIVENESS

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PART 1: LECTURE OUTLINES
CHAPTER 1 ORGANIZATIONS AND ORGANIZATIONAL EFFECTIVENESS
TEACHING OBJECTIVES
1. To define an organization and explain how it creates value in three stages: input, conversion, and output. (1.1) 2. To discuss why organizations exist and how they achieve goals collectively. (1.1) 3. To describe organizational theory, how organizations function, and relate to organizational structure, culture, and design. (1.2) 4. To show how organizational design helps a company gain a competitive advantage, deal with contingencies, manage diversity, increase efficiency, increase innovation, and effectively manage change. (1.2) 5. To illustrate the consequences of
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Inputs include human resources, raw materials, capital, money, and information. The value created depends on how a company selects and acquires inputs. Inputs are transformed into outputs at the conversion stage. The value created depends on the quality of an organization’s skills and its ability to learn from the environment. The conversion process results in an output, a finished good, or a service. Sales revenue buys more inputs, so the value creation cycle continues. The value creation cycle is used for nonprofit and manufacturing organizations and service companies. Q. What are the inputs, conversion processes, and outputs at McDonald’s? (Fig. 1.2) A. The inputs include meat, fries, employees, and capital, such as cooking equipment. The conversion process entails cooking the food. The outputs are sandwiches and fries. Why Do Organizations Exist? People working together to produce goods and services create more value than people working alone. (Fig. 1.3)

Organizations exist:
To Increase Specialization and the Division of Labor In an organization, individuals concentrate on areas of expertise and become more specialized. An engineer concentrates on one part of the engine and this specialization creates value. To Use Large-Scale Technology Technology enables organizations to achieve economies of scale, cost savings through large-volume production, and economies of scope and cost savings when underutilized resources are shared. To Manage the External Environment An

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