Organization theory and design: Lecture 11

Organization theory and design: Lecture 11 provides students with content about: the external environment; environment comprises of various sectors; environmental uncertainty; adapting to environmental uncertainty; simple/complex dimension; stable/unstable dimension;... Please refer to the lesson for details!

The External Environment

The External Environment

Basics

• Organizational environment is defined as

all elements that exist outside the

boundary of the organization and have the potential to affect all or part of

organization

• An organization’s Domain is the chosen

environmental field of action (niche)

The External Environment

Sectors

• Environment comprises of various sectors:

1 Industry

2 Raw material

3 HR sector

4 Financial resource sector

5 Market sector

6 Technology sector

7 Economic conditions sector

8 Government sector

9 Sociocultural sector

Environmental Uncertainty

• Simple/complex dimension

• Stable/unstable dimension

Adapting to Environmental

Uncertainty

• Refer to open systems theory

• Each sector in the external environment requires an employee or department to deal with it

• Buffering departments

• Boundary spanners

• Departmental Differentiation & Integration

Adapting to Environmental

Uncertainty

Organic and Mechanistic Design:

• Stalker’s study: “When the external

environment was stable, the internal

organization was characterized by rules, procedures, and a clear hierarchy of

authority….in a rapidly changing

environment the internal organization

was much loose, free-flowing, and

adaptive.”

Adapting to Environmental

Uncertainty

Mechanistic Form

1 Tasks are broken down into specialized

separate parts

2 Tasks are rigidly defined

3 Strict hierarchy of authority and control,

many rules

4 Knowledge and control of tasks are

centralized at the top of the organization

Adapting to Environmental

Uncertainty

Organic Form

• Employees contribute to the common tasks of

the department

• Tasks are adjusted and redefined through

teamwork

• There’s less hierarchy of authority and control,

a few rules

• Knowledge and control of tasks are located

anywhere in the organization

• Communication is horizontal