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Summary Organisation Theory
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Summary Organisation Theory. Wrote down almost everything what was being said in the (online) lectures.
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Summary Organisation TheoryLecture 1 & 2 introduction (Chapter 1,2)
Lecture 1
What is an organisation? Which social collective is NOT an organisation?
- An organized group of people with a particular same purpose
o It can bring organisation together with different purposes
- A movement is not an organization → true
o Difference between movement and organisation?
▪ Movement = group of people with a common purpose
• Everybody can become member of the movement
▪ Difference = think about something like membership.
• Organisation is a group of people that all share the same formal
membership
• Member of an organisation have different rights than someone who
is not a member of the organisation
• The organisation can decide on who is a member and who not
What are management practices? Which practices in organisations are NOT management practices?
- Methods of renovating the work and providing more efficiency → different tasks for
everybody need to be fulfilled to let the organisation work
- Working methods and innovations managers use to make the organisation more efficient
Management and organizations:
- We can differentiate between managing as a practice, as something that we do
and organizations, as social system that emerge from social practice
- Organizations are goal-oriented collectives in which formal members are organized
o Being organized means being an element in a systematic arrangement or parts which
together are meant to create a unified, organic whole
o Formal membership means that an explicit and legitimate decisions for or against
membership can be taken by a pre-specified position within the organizational
hierarchy. Membership implies specific rights and duties within an organization.
- Managing as a practice encompasses all actions taken by organization members that are
meant to fulfil one or more of the following functions for the organization: planning,
organizing, staffing, directing, controlling.
What is organizational theory?
- A theory is the answer to a question of why
- Theory is about the connections among phenomena or variables, a story about why acts,
events, structure, and thoughts occur
- A good theory explains, predicts, and delights
What is a theory good for?
- Theory as a looking glass & perspective: theory helps us to:
o Sharpen our view
o To focus on specific aspects
o To see the same phenomenon from different angels
,Lecture 2
Module 1: The world of contemporary organizations
Key issues:
- What are the major societal developments affecting contemporary organizations?
- What is hyper competition?
- What are the characteristics and needs of the millennial workforce?
Major societal shifts affecting contemporary organizations
Different problems with a global society → social inequality – grand challenges – hyper competition -
Social inequality → income inequality is a globally problem
- Inequality is there, but it is not much a problem
o Inequality serves to motivate entrepreneurial action = inequality is a driver of
innovation
o Reducing inequality (too much) decreases economic efficiency - - > with too less
inequality, people will be less motivated to really give their best and therefore the
society will use their resources inefficient
o Trickle-down economics reduces inequality quasi –naturally - - > because the rich get
richer, they will spent more and that will lead to the trickle-down effect where the
wealth of the one percent slowly but gradually will trickle-down and also make the
99% richer over time.
The other line of argumentations says that inequality is bad:
- Inequality reduces trust (in others and in institutions)
- Inequality increases social unrest - - > more protest if a society has a high level of equality
- Inequality reduces political consensus within a society - - > rich and poor have different
wants and needs.
- Inequality is self-reinforcing - - > rich get richer and poor get poorer, that can lead to
dynamics that increase the pressure and make the rich even richer and the poor even
poorer.
Social inequality is not just the only problem that we face as a global society. There are numbers of
problems that are in the literature often called, the grand challenges.
Grand challenges → Grand challengers are ‘’massive social and environmental issues that have
potential or actual negative effects on large numbers of people, communities and the planet as a
whole.’’
- E.g. ending poverty and hunger, establishing good health and education, reducing gender
and racial inequalities, fostering clean water and energy, and taking climate actions
o Actions that need to be done to address the grand challenges that we are facing
That might be true, but it is not the problem of for-profit organizations. Their job is to produce
products and provide services. However, for-profit organizations ae increasingly held accountable
(for their contribution or the harm that they do to the society as a whole).
- Triple bottom line reporting → not just report on their economic returns, but also on their
social and environmental results
- CSR programs
- Climate-smart organizing
- Diversity programs
All these are signs that pressure on for-profit organizations increases to become more responsible.
The next major societal shift that effecting contemporary organizations is:
,Hypercompetition → ’’an environment characterized by intense and rapid competitive moves, in
which competitors most move quickly to build advantages and erode the advantages of their rivals.
This speeds up the dynamic strategic interactions among competitors.’’
o so hyper competition is an environment where firms are really starting to act much
quicker and strategic actions cannot be planned anymore for the next 10 years. They
really needed to be to focus on ‘right now’.
- By implication, it becomes increasingly more important for organizations to be able to adapt
quickly, to be agile, while it becomes less relevant to have a well thought-out plan.
o That is true because the plan might be great but if it is too well thought-out, you will
have to use a lot of time to develop that plan and invest a lot of resources in the
research that is necessary to come up with the perfect plan. And while you are doing
that, spending resources on a perfect plan, the world has changed already. And now
you’re whole resources and planning is useless, because it took you too long to
actually do something.
▪ That is why in hyper competition, organizations need to be highly agile.
(hoog aanpassingsvermogen)
Millennials & zoomers rising → Millennials (born 1980 – 1995) and Zoomers (born 1995 – 2010) are
the two most relevant generations of employees and consumers today.
They have characteristic needs and wants:
- Tech-savy, work-life balance is important, longing for safety & purpose, many job changes if
they don’t find the purpose in their job they want to find, they are assertive.
- They are in short supply (ageing population → less younger and more older people
and therefore
- Contemporary organizations need to be prepared to win the war for talent
o Purpose-full jobs, cater to highly diverse work-life-balance-needs, provide
opportunities for development
Summing up:
Contemporary organizations are confronted with a number of really critical challenges.
You need to know now:
- What are the main challenges that managers of contemporary organization face today?
- How do so called Grand Challenges affect the management of contemporary organizations?
- Why is it so important for contemporary organizations to cater the needs of Millennials and
Zoomers?
, Module 2 Digital turn
A lot of the challenges of contemporary organizations that we talked about in the first module, are
consequences of the rise of digital technologies.
Digital technologies change the context in which contemporary organizations are embedded.
Digital technologies also change the organizations themselves and have a deep impact on
management practices.
Key issues:
How does digital technology change organizations?
- Platform-based business models, Open innovation, the Gig Economy
How does digital technologies change management practices?
- Business process management (BPM), self-management
How does digital technology change organizations?
Platform-based business models:
A business model is the value proposition that an organization makes to its customers. It is the basic
rational for how to make money with the products and services this company offers.
An important part of the value that is created by organizations, has traditionally been eaten up by
the high transaction costs, that are related to many services.
- Transaction costs are the total costs of making a transaction possible
o Costs incurred to make the transaction possibly or likely (ex-ante costs)
▪ Costs of bringing buyer and seller together
o Costs that arise after the transaction has taken place (ex-post costs)
▪ Transportation costs, control costs
Digital technologies can often help to reduce transaction costs, thereby allowing for platform-based
business models.
So the possibility to build these digital platforms that do all that for the transaction partners,
adversely no costs and it enables the platform provider to already make money from a very very
small fee on each transaction taking place.
This is the business model, the value proposition, of firms like Spotify and google etc.
Organizational research has shown that to be successful with a platform-based business model,
organizations need to become more open and accessible, drive a more collaborative vision, and
create an attractive ecosystem.
- Spotify or google only makes money if they can actively engage in a very large number of
transaction partners on both sides (buyers and suppliers).
Open innovation:
Digital technology has dramatically reduced the costs and complexity of developing new (digital)
products and services and, as a consequence, has increased the pressure to remain innovative for all
companies.
- Since it became so easy to innovate and create new products and services, this increases the
speed of innovation because nobody wants to leave behind
One solution is for organizations to (make use of digital technology to) open up their innovation
process to new groups, in the hopes of accelerating their innovation process.
- This slows down the innovation process
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