PoM Flashcards
organization
a collective effort to achieve specific objectives
efficiency
using minimal resources to achieve goals
effectiveness
choosing appropriate means to reach goals
basic variables
- fixed costs
- variable costs
- break even point
- marginal revenue
- marginal costs
transaction costs
costs incurred in market transactions
horizontal integration
combining firms in the same industry
vertical integration
combining firms at different production stages
joint stock corporation
business entity allowing share ownership
MNE
- multinational enterprise
- firm operating in multiple countries
power structures
influence dynamics within organizations
critical management studies
examines organizational problems like exploitation
market failures
inefficiencies requiring government intervention
public sphere
political domain distinct from private business
private sphere
domain of individual business activities
management role
coordinating activities in organizations
emergent processes
unplanned development within organizations
organizational structure
framework defining roles and responsibilities
strategic management
focus on long-term competitive success
complex organizations
firms with intricate structures and roles
cognitive reasons
challenges in maximizing due to understanding limits
ethical reasons
moral implications of profit maximization
role of markets
efficient resource allocation mechanism
governance
supervision of managers to align interests
modern technologies
enable large scale production in organizations
specialization
focus on specific tasks to increase efficiency
coordination
efforts required for large organizations to function
weber
- bureaucracy
- 1921
- management based on rational principles and authority
legitimate authority
acceptance of authority based on three types: charismatic, traditional, legal
charismatic authority
leadership based on personal appeal and inspiration
traditional authority
power derived from historical customs and practices
legal authority
authority based on established laws and regulations
bureaucracy characteristics
- rules
- specified competencies
- hierarchy
- technical training
- neutrality
- written recording of rules and decisions
pros of bureaucracy
efficient, reliable, stable, precise management
cons of bureaucracy
- rigidity and lack of creativity
- only takes into consideration impersonal factors
scientific management
- focus on optimizing labor processes for efficiency
- Taylor
time studies
(Taylor)
measure average time for specific tasks
specialization increases efficiency due to:
- learning effects: efficiency increases with repeated task performance
- economies of scale: cost per unit decreases with increased production
- synergies: accomplishing similar tasks reduces overall efforts
fayol’s functions of management
- planning
- organizing
- command
- coordination
- control
critique to taylor
- motivation exclusively through money
- can lead to monotony, increased speed of work, alienation and loss of self-determination
- Hawthorne and Theory X and Y
fayol
- administrative approach
- manage process as a whole
- organizing as engineering
fayol critique
- abstract principles
- no empirical proof
assumptions about the individual
- unreliable
- unable to understand the organization and take responsibility
- need to follow rules
- exclusively motivated materially
assumptions about the organization
- coordination comes from the top
- all that matters is efficiency
- future can be foreseen
- division of labor
- hierarchy
assumptions about theory
- able to produce generally applicable rules
- aim to increase efficiency
u-form
unitary structure focusing on functional differentiation
m-form
multidivisional structure to avoid u-form challenges
u-form challenges
- too many interfaces
- diffusion of responsibilities
- overwhelming load at the top
- low flexibility
matrix organization
- combines functional and project-based leadership
- solution to U and M forms
project organization
organizes tasks under unique and novel conditions
integration
bringing together elements for consistent task processing
differentiation vs integration
balancing specialization with cohesive task processing
burns and stalker study
examined organizational structure in changing environments
environmental influence
organizational structure affected by external conditions
classical organization theories
- early frameworks for understanding large organizations
- focused on structures
critique of classical theories
overemphasis on formal features and authority
environmental turbulence
speed of innovation affecting organizational structure
mechanistic structure
organizational design suited for stable environment. rigidity and hierarchy.
organismic structure
flexible design for adapting to turbulent conditions. requires cultural shift and commitment to shared goals
top-down decision making
hierarchical approach ineffective in turbulent environments
horizontal communication
lateral information flow in organismic systems
contingency theory
- organizational structure depends on environmental conditions
- basic assumptions:
1. each type of environment has an ideal structure
2. organizations can’t change their environments
3. organizations need to deliver specific performance levels
performance levels
organization must meet acceptable, not necessarily maximized, performance
functional equivalents
multiple solutions exist for organizational problems
organizational environment
includes global, technological, political, socio-cultural factors
task environment
- directly influences organization
- competitors
- substitution products
- demanders
- suppliers
- industrial relations
complexity
number of diversity of elements in the environment
dynamics
rate of change within the organizational environment
pressure
threat level from environmental elements to organizations
equivocality
conflicting interpretations complicating decision-making
Ashby’s law
adaptive systems must match environmental variety
organizational complexity
abstract concept evaluated by specialization and differentiation
resource dependence theory
organizations rely on external resources controlled by others
buffering
stockpiling resources to limit dependence
legitimacy
do relevant stakeholders accept the chosen strategy?
isomorphism
increasing similarity among organizations due to external pressures
rationalized myths
structures that appear rational but lack efficiency
stakeholder power
influence based on hierarchy, expertise, or resources
legitimacy demands
pressures for organizations to conform to norms
vertical differentiation
hierarchical layers within an organization increasing complexity
horizontal differentiation
number of functions within an organization increasing complexity
mimetic isomorphism
organizations imitate others to gain legitimacy
coercive isomorphism
organizations are pressured to adopt certain features
normative isomorphism
organizations conform to societal norms and standards
decoupling
pretending to adopt practices while not implementing them
institutional logics
different society spheres have unique legitimate and authority sources
state, market, profession (expertise and professional association)
environmental determinism
environmental conditions dictate organizational responses
value chain
how resources integrate in production processes
core competencies
unique strengths that provide competitive advantage
Porter’s five forces
- threat of new entrants
- bargaining power of customers
- threat of substitutes
- bargaining power of suppliers
- rivalry among competitors
market saturation
degree of competition in a market
exit/entry barriers
costs associated with entering/leaving a market
niche market
targeting specific segment of the market
core market
primary area of business focus
organizational analysis
evaluating internal strengths and weaknesses
scenario development
creating potential future scenarios for planning
feasibility
availability of resources to implement a strategy
balanced scorecard
tool for measuring strategy implementation success
structural considerations
organizational structure’s role in strategy execution
strategic HR management
aligning HR practices with strategic objectives
premise control
monitoring foundational assumption of a strategy
Hawthorne experiments
- study on how working conditions affect productivity
- increases in productivity cannot be explained by working conditions, but by individual employees and their interactions
human relations movement
- focus on employee motivation and interpersonal relations
“happy workers are good workers”
- contrast with Taylor (bc it was inhumane)
immaterial incentives
- goal attainment
- pride in the work
- influence
zone of indifference
area where employees accept authority without question
Maslow’s hierarchy of needs
- needs categorized by urgency
- in organizations: the more an organization allows individuals to meet their needs, the more motivated they will be
critique of maslow
questions validity and measurement of needs
Herzberg’s motivation-hygiene theory
- study on factors affecting job satisfaction
- dissatisfaction as a result of external factors
- satisfaction as a result of work-internal factors
dissatisfiers/hygiene factors
- dissatisfaction as a result of external factors
-e.g.: company policy, supervision, relationship with supervisor
satisfiers/motivators
- satisfaction as a result of work-internal factors
- e.g.: achievement, recognition, work itself, responsibility, growth
personal planning
ensuring adequate quality and quantity of personnel
theory X
- assumes humans dislike work and need control. wage is not sufficient for motivation.
- problematic outcomes (“vicious circle”)
theory Y
- assumes work can fulfill human potential. humans have an untapped potential for creativity
- desirable outcomes (“virtuous circle”)
intrinsic motivation
motivation derived from work itself
extrinsic motivation
motivation from external incentives, like wages
crowding out effect
extrinsic incentives diminish intrinsic motivation
over-justification
external rewards undermine intrinsic motivation
task identity
completion of a whole, identifiable piece of work
managerial legitimacy
ideological function securing management’s authority
emergent organizational phenomena
processes beyond formal structures and intentons
rational-choice perspective
individuals make decisions to maximize efficiency
emergent decision making
decisions shaped by organizational processes
organizational differentiation
departments operate with unique rules and perceptions
organized anarchy
decision-making resembles a ‘garbage can’ model
oversight
formal decisions made, core problems unresolved
flight
formal decisions shifted, core problems remain
resolution
formal decisions lead to solving core problems
formal groups
planned groups focused on specific tasks. planned
informal groups
unplanned groups based on personal connections
formal groups
planned groups focused on specific tasks
cohesion
stability increases with group homogeneity
groupthink
- cohesive groups prioritize unanimity over critical thought
- when a group make decisions in way that prioritizes harmony and agreement over critical thinking
symptoms of groupthink
- indicators include illusion of invulnerability and self-censorship
- illusion of invulnerability
- blindness for ethical consequences
- rationalization
- steoreotypisation of outsiders
- self censorship
- group censorship
- brain guards
- illusion of unaniminity
avoiding groupthink
encourage doubt and designate a ‘devils advocate’
espoused values
unwritten moral standards shared by members
typologies of cultures
attempts to categorize complex organizational cultures
dysfunctional cultures
negative cultures influenced by CEO personality
positive effects of culture
- orientation of action
- efficient communication
- fast decision making
- efficient implementation
- low control requirements
- motivation and team spirit
- stability
negative effects of culture
- tendency of closure
- devalorization of new orientations
- barriers to change
- traditional patterns of success
culturalism
culture as a lifeworld beyond managerial influence
course correction
middle ground approach to cultural change
emergence
a central feature in organizational behavior
limited rationality
decisions often arise from emergent, not rational, processes
power dynamics
interactions of power and resistance within organizations
causal power
A causes B to perform an action
episodic power
power is observable through specific behaviors
situational power
power varies across different contexts and situations
bases of coercive power
sources include position, skills, and resources
external uncertainty
low levels in monopolistic companies affect power
internal uncertainty
machinery malfunctions create challenges for technicians
value statements
impulses for re-orientation in organizational culture
resisting coercion
refusal undermines power’s flow of domination
passive refusal
non-compliance as a form of resistance
active refusal
escalation of opposition against authority
forms of refusal
- work to rule
- strikes
- theft
- sabotage
manipulation
“power through non-decision”
- controlling decisions by steering them towards ‘safe’ topics
forms of manipulation
- anticipation of results
- mobilization of bias
- institutionalized rule- and norm-making
anticipation of results
people anticipate how power will be used in the future and act according to what they think is expected
mobilization of bias
excludes undesired options from decision processes
institutionalized rule-making
design of rules in favor of the powerful group
shortcomings of manipulation focus
- difficult to falsify and research empirically
- focus on individual behavior
- neglects higher level structures
resisting manipulation
voice allows participation in power discussions
forms of voice
includes trade unions, social movements, protests
domination
shaping of preferences and attitudes through power
sources of domination
unquestioned rules, ideology, cognitive schemas
technological rationality
efficiency-focused decisions benefiting powerful elites
culture management
framing culture as a resource for productivity
resisting domination
irony and cynicism as resentment. resentful detachment as a way to escape domination
cynicism
passive resistance to domination. creates distance from roles (employee feels like they don’t have to be fully involved in their job, which can be a relief)
managerial view of cynicism
seen as a problem needing to be fixed
humanist view of cynicism
mechanism to protect the self from colonization
subjectification
how a person’s feelings and thoughts affect the choices they make. organizational decisions shape?
centralized organization
decision-making power is concentrated at the top levels of management
sources of subjectification
- discipline
- discourses
- governmentally and self-monitoring mechanisms
resisting subjectification
creating alternative identities and representations
critical management studies
looks at limitations of common management theories and practices
coercion and manipulation
individual forms of power requiring resistance
domination and subjectification
structural forms of power needing escape and creation
escape
cynicism as a response to power relations
creation
using power to generate unintended outcomes
emancipation
transformation of theory to eliminate domination
marxism
critique of capitalism focusing on class struggle
critical theory
philosophical approach questioning societal structures
feminist theories
analysis of gender inequality in society
environmentalism
movement advocating for ecological protection
exploitation
workers receive less value than produced
wage disparity
difference between wage and value created
global south
developing countries with low wages
environmental destruction
profit generation harming natural ecosystems
alienation
loss of connection in production processes
corporate social responsibility
- CSR
- voluntary firm actions for social good
social enterprises
organizations prioritizing social value creation
sharing economy
model promoting resource accessibility and sharing
monological approach
individual-focused ethical decision-making framework
dialogical approach
involves stakeholders in ethical discussions
discourse ethics
norms derived from collective discussion
communicative rationality
argument-based consensus in discussions
ideal speech situation
equal power in discourse for fairness
partial organizations
application of organization theory in specific areas
features of organizations
- membership
- specified member roles
- formalized rules
- clear objectives
sanctions
consequences imposed for rule violations
hybrid organizations
entities meeting multiple, often conflicting, demands
institutional logics
competing frameworks shaping organizational behavior
lobbying
efforts to influence political decisions by organizations
behavioral pattern of groups regarding risk taking
groups tend to take more decisions than individuals because:
- diffusion of responsibility
- leadership: leaders take risks
- risk as social value
“centrifugal tendency”
- dilemma m-form
- independence of functions and units
global environment
- technological
- political/legal
- socio-cultural
- ecological
- macro-economic
features of information
- uncertainty
- equivocality
dimensions of characterizing organization
- complexity: variables in the environment
- dynamics: changes in environment
- pressure: threats from variables
stakeholder theory
any group/individual who can affect or is affect by the achievement of organizations objectives
environmental analysis
1- identification of key indicators and prognosis of developments
2 - analysis of interdependencies
3 - scenario of development and evaluation
4 - setting premises for further planning process
strategic options (fundamental questions)
1- where to compete?
2. according to which rules?
PDCA
Plan Do Check Act
strategic control (multi-level process)
- premise control
- implementation control
- strategic surveillance
Hawthorne effect
people change their behavior simply because they know they are being observed or studied
what characterizes good jobs?
- skill variety
- task identity
- task significance
- task significance
- autonomy
- feedback from the job
how to create better jobs?
- combining tasks
- forming natural work units
- establishing client relationships
- vertical loading
- opening feedback channels
vertical loading
reducing split between doing and planning
emergent organizational phenomena
- cannot be explained by organizational structures and specific intentions
- outcomes cannot be predicted
decision in organizations - perspectives
- rational-choice perspective: individuals are rational decision-makers and the organization is a rational system
- reality: outcomes are often unintended
satisficers
don’t aim to achieve an optimal outcome
what are organizational decisions a result of?
- manipulation
- power plays
- compromise
organized anarchy
- decision process shaped by four independent streams:
1. problems
2. choice opportunities
3. participants
4. solutions
structure of organizational culture
- artifacts and symbols (visible but in need of interpretation)
- espoused values and beliefs (partly visible and sub-conscious)
- underlying assumptions (invisible)
basic assumptions (organizational culture)
- environment: invariable or manageable
- truth: moral or amoral
- time: too early or too late
- nature of humans: benevolent or malevolent
- nature of human action: proactivity or reactivity
- nature of interpersonal relations: competition or cooperation?
approaches towards cultural change
- cultural engineering
- culturalism
- course correction
cultural engineering
organizational cultures can be planned and changed systematically
steps towards culture change
- diagnosis
- assessing the need for change
- providing impulses for re-orientation
bottom line
there are clear limits to changing organizational cultures
coercion
getting a person to do something that they wouldn’t have done naturally
features of coercive power
- causal
- episodic
- situational
bases of coercive power
- position
- skills
- ability to cope with uncertainty
- access to critical resources
problems with regulation
- time lag problem
- problems with law-making
- implementation problems (costs)
