Summary Organization Theory, Chapter 9 and 10
Organizational Structure (EBP670C05)
Rijksuniversiteit Groningen
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Summary Chapter 9 & 10
Power Control
This chapter is going to be about the power-control view, this view states that the structure of an organisation is always based on the person in control, selecting a structure that lets him maintain that control.
Researcher John Child came up with the strategic choice argument, which can be divided into four parts:
Decision makers have more autonomy than that implied by those arguing for the dominance of environmental, technological or other forces. Organisational effectiveness is a range, not a point, it is impossible to measure and state a maximum amount. Organisations can often control or manipulate their environment. Perception is key in the relation of environment and organisation.
The previous view assumed that managers always go for the most rational choice, however this is usually not the case, managers can be influenced by self-interests, a lack of information and a number of other things.
Not only managers challenge the previous view, the environment also plays a huge role. An organisation has to deal with legacy systems (we always did it like this.), external pressures and management fashions, if one organisation is successful with a certain structure, other organisation like to think it will work for them as well. Organisations also have to make sure that they put the right manager in the right position, and not make a design-specialist head of administration.
How does one gain power however? Evidence indicates that there are three ways to achieve power within an organization:
Simply hierarchical power, a top level manager has more power than a middle manager. Control of resources. Being in a position of network centrality.
An organisation also has to deal with Politics, however not every employee has to deal with politics equally often, this depends on the position in the hierarchy, coordination between departments, allocation of resources, responsibility and structural changes.
The power-control model implicates that technology and environment influence managers choices rather than actually determining the structure.
Implications based on the power-control view
- impact from technology and environment on structure
Organisational slack point out the resources which are minimum requirements for organisational effectiveness and which has an organisation in order to respond to environmental change without changing the organisation. The less slack an organisation has, the greater the pressure to have a well- fitting structure for the environment and the more limited the options to adjust the company to a changing environment. Mechanistic structure and stable environment: those in power will implement a structures that secure their control. Formalisation: organisations will have a high degree of formalisation because the strategy aspect of the organisation wants to be in charge. Complexity: increased differentiation causes difficulties in communication and control. In order to boost control management tends to choose the structure with the lowest complexity. Centralisation: those in power like to be in charge. Management gives responsibility away but always holds the authority.
An organisation needs a structure which allows that: Implements strategies Defines areas of responsibility Provides control mechanisms Facilitates the flow of production Promotes coordination and information flows Maintains and promotes organisational knowledge
Freshening up old approaches - bureaucracy revised:
Focusing management effort on key responsibilities. Rethinking the centralisation-decentralisation balance. Moving focus from internal processes to external adaption. Greater use of market controls. Improving communication flows. Concentrating effort on core competencies. Improving availability of information.
Emerging organisational innovations:
For this part we copied table 10 on page 339 of the book: Organisation Theory, concepts and cases 5th edition by Stephen P. Robbins and Neil Barnwell
Less of More of National focus International focus Internal orientation External orientation Customers and suppliers at arm's lenght Integrating up and down the supply chain Emphasis on hierarchy Functional and cross-functional teams Administrative control Market control Hoarding knowledge Spreading knowledge Inspecting quality in Building quality in Emphasis on physical assets Emphasis on knowledge Lifetime employment Lifetime employability
This table shows the trends in the organisational orientations. Many of the environmental and technological changes cannot be accommodated simply by modifying bureaucratic structures. This table indicates the shifts in emphasis to a number of structural changes.
The virtual organisation:
An organisation having the characteristics of a formal organisation while not being one. It contains a smaller organisations which each contribute a part of production process. Boundaries between them are fuzzy, and control is by market forces.
Structural compromises:
Organisational structures are the result of compromise, with managers concentrating their design effort on addressing what they see as the most important problems. This does not mean the organisation faces only one problem. Each different problem needs addressing with different structural solutions, but it is not possible to have different structures at the same time. So compromises need to be made and difficulties need careful management.
Summary Organization Theory, Chapter 9 and 10
Vak: Organizational Structure (EBP670C05)
Universiteit: Rijksuniversiteit Groningen
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