Organisations and Organisational Effectiveness Flashcards
Organization
A tool people use to coordinate their actions to obtain something they desire or value.
Entrepreneurship
The process by which people recognise opportunities to satisfy needs and then gather and use resources to meet those needs.
Organisational environment
The set of forces and conditions that operate beyond an organisation’s boundaries but affect its ability to acquire and use resources to create value.
Inputs
Resources such as raw materials, machinery, information and knowledge, human resources, and money and capital
Organization obtains inputs from its environment:
Raw materials
Money and capital
Human resources
Information and knowledge
Customers of service organisations
Organization transforms inputs and adds value to them:
Machinery
Computers
Human skills and abilities
Organisation releases outputs to its environment:
Finished goods
Services
Dividends
Salaries
Value for stakeholders
Sales of outputs allow organisation to obtain new supplies of inputs:
Customers
Shareholders
Suppliers
Distributors
Government
Competitors
Why do organisations exist?
Organisations exist as they can create more value together
To increase specialisation and the division of labour
To use large scale technology
To manage the organisational environment
To economise on transaction costs
To exert power and control
Economies of scale
Cost savings that result when goods and services are
produced in large volume on automated production lines.
Economies of scope
Cost savings that result when an organisation is able to use underutilised resources more effectively because they can be shared across different products or tasks.
Transaction costs
The costs associated with negotiating, monitoring, and governing exchanges between people.
Organisational theory:
The study of how organisations function and how they affect and are affected by the environment in which they operate
Organisational structure:
The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organisational goals.
Organisational Design and Change
The process by which managers select and manage various dimensions and components of organisational structure and culture so that an organisation can control the activities necessary to achieve its goals
Organizational Culture
The set of shared values and norms that controls organisational members’ interactions with each other and with people outside the organisation.
Controls coordination and motivation; shapes behaviour of people and the organisation.
Is shaped by people, ethics, and organisational structure.
Evolves as organisation grows and differentiates.
Can be managed and changed through the process of organisational design.
Organisational design
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.
Organisational change
The process by which organisations redesign their structures and cultures to move from their present state to some desired future state to increase their effectiveness.
Contingency
An event that might occur and must be planned for.
Competitive advantage
The ability of one company to outperform another because its managers are able to create more value from the resources at their disposal.
Core competences
Managers’ skills and abilities in value-creating activities
Strategy
The specific pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors.
Chief operating officers (COOs)
Made responsible for overseeing organisational structure and culture.
COOs create and oversee teams of experienced senior managers who are responsible for organisational design and for orchestrating not only small and incremental but also organisation-wide changes in strategy, structure, and culture.
The three most important processes managers use to assess and measure how effective they, and their organisations, are at creating value:
Control, innovation, and efficiency
External resource approach
A method managers use to evaluate how effectively an
organisation manages and controls its external environment
Internal systems approach:
A method that allows managers to evaluate how effectively an organisation functions and resources
operate
Official goals:
Guiding principles that the organisation formally states in its annual report and in other public documents.
Mission
Goals that explain why the organisation exists and what it should be doing.
Example of official goals:
being a leading producer of a product, demonstrating an overriding concern for public safety, and so forth
Operative goals:
Specific long-term and shortterm goals that guide
managers and employees as they perform the work of the organisation
Technical approach
A method managers use to evaluate how efficiently an
organisation can convert some fixed amount of organisational resources into finished goods and services.
