ch6 Flashcards
what is Organisation size:
Organization size is generally accepted as referring to the total number of employees.
Size does not dictate all of an organization’s structure but it is important in predicting some dimensions of structure which have widespread applicability.
what did Advocates of the size imperative: Peter Blau find
found that increasing size promotes structural differentiation but at a decreasing rate. Increases in organisation size were accompanied by initially rapid and subsequently more gradual increases
what did aston group find
Aston group concluded ‘an increased scale of operation increases the frequency of recurrent events and the repetition of decisions’ which makes standardisation preferable.
what did Meyer find a relationship between
- size and structural dimensions does not imply causation.
- Conducted a longitudinal study for 5 year period.He found that the effects of size showed everywhere; the relationship was unidirectional; and the impact of other variables that appeared to impact structure disappeared when size was not controlled.
How does Size affect complexity
Size and Complexity
-Blau found that size on complexity was at a decreasing rate, in government organisations, maybe on business firms also but not proven.
The strongest case can be made for the effect of size on vertical differentiation.
How does Size effect formalisation(5)
Size and formalisation
- Aston findings support he view that size affects formalisation.
- Management seeks to control the behaviour of employees.
- Popular methods are surveillance and high formalisation.
- One author proposed that larger organisations formalize those activities which tend to occur often.
How does Size effect Centralisation
Size and centralisation
As we concluded formalisation increase with size, this formalisation allows top management to delegate decisions while at the same time ensuring the decisions are made according to the desires of top management.
advantages of size(6)
- leverage to capturing significant market share.
- improves access to low cost capital.
- brand recognition and advertising benefits.
- greater investment in R&D.
- global reach.
- facilitates expertise and systems development.
Common problems of large size(9)
- The growth of bureaucracy/ high formalisation
- The need to gather and process information and turn it into knowledge.
- Knowing where your profits are being made and costs occurred.
- Difficulty in managing over a wide area.
- Bounded rationality
- lower employee satisfaction.
- resistance to innovation.
- coordination problems.
- Large organisations are often highly scrutinized
Some solutions to the issue of size(6)
Solutions:
- Dividing the organisation into manageable parts.
- Outsourcing.
- balance between what decisions to centralize and decentralize.
- Structuring to facilitate change.
- Ensuring that important tasks have someone responsible for them
- Physically separate those areas of the organisation which undertake different types of work.
Organisation theory and small businesses.(3)
- Small business could be described by a business where one person, generally the owner makes all the major decisions.
- Small businesses tend to have low horizontal and vertical dispersion, they tend to be less formalised and high centralisation.
- The organisation theory which take on greater importance for small businesses include, accountability, economies of scale and environmental dependence.
What is downsizing
Downsizing; The planned elimination of positions or jobs.
Often used to describe layoffs due arising from technological change.
Reasons to downsize (9)
Reasons:
- Increased competition.
- Computerization and automation.
- Technological obsolescence.
- Declining profitability.
- Changing roles and middle management.
- Limitation of size advantages.
- Changes in strategy.
- Changes in structure.
- Rise of outsourcing.
Results of downsizing (6)
- Lowered overheads.
- Less bureaucracy.
- Faster decision making.
- Smoother communications.
- Greater entrepreneurship.
- Increased productivity.
Ineffective downsizing practices. (9)
- early retirement practices
- Making across the board layoffs
- Eliminating training and development programs
- Cutting too deeply into numbers of personnel
- Placing remaining employees into jobs for which they have insufficient skills
- Emphasizing employee accountability over employee involvement
- Expecting survivors to ‘row harder’
- Implementing layoffs slowly in phases over time
- Promising high monetary rewards rather than careers
