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Summary Organization Theory
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A clear and helpful summary of the book + notes of the lectures to prepare for the final exam.
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Chapter 1: Managing and organizations – opening, thinking, contextualizingINTRODUCTION
Managing and organizations are dynamic elements of the contemporary world, changing rapidly
What managers do is to make sense of these changes and other stimuli in the environments
in which they find themselves.
- Sensemaking, sensegiving and sensbreaking
To be organized means being an element in a systematic arrangement of parts, hopefully creating a
unified, organic whole
Management = the process of communicating, coordinating and accomplishing action in the pursuit
of organizational objectives, while managing relationships with stakeholders, technologies and other
artefacts, both within as well as between organizations.
- Organizations are tools: they are purposive, goal-oriented instruments designed to achieve a
specific objective
o Organizations extend human agency, as Perrow (1986) argues. As such, for those
who are able to control them, organizations are practical tools for accomplishing
their goals.
CONTEMPORARY MANAGING AND ORGANIZATIONS IN A CHANGING WORLD
Digitalization = the use of digital technologies and of data (digitized from non-digital sources or
originally created as such) to manage organization processes.
- Digital nomads are mobile workers armed with a laptop and Wi-Fi, connecting anywhere and
choosing mobility rather than a fixed abode.
o digital nomads create problems for tax authorities: they can contrive not to be
anywhere long enough to be liable for taxation and it is very easy for them to ‘fly
under the radar’ of national tax authorities
not only there are new types of workers but also the organizations digitalize
- those industries that thrive only because of low-cost labour will either be outsourced to
countries where workers have fewer rights and protections, or increasingly adopt robotics
and artificial intelligence (AI)
o limit the opportunities for that through earnings legislation and enforcement and the
objections would be dissolved.
- Switching management : hard power -> soft power. Because of highly skills that can not be
easily supervised
New public management replaces public sector bureaucracy with public managers and citizens with
customers, managed by targets and audits.
- Rather than use a traditional organization theory of bureaucracy, such as that of Weber
(1978), the reformers of the new public management were inspired by classical
microeconomic theories that had a strong ‘normative influence’ on public-sector reforms
- Loungani and Furceri (2016), that argues that ‘austerity policies not only generate substantial
welfare costs due to supply-side channels, they also hurt demand – and thus worsen
employment and unemployment’. So the combination of tax cuts and austerity is toxic for
national economies and the majority of people
CONTEMPORARY ORGANIZATIONAL CHANGES
- Principal agency theory (Jensen and Meckling, 1976) has a fundamental premise that the
provision of capital by shareholders is a risk-based endeavour in which the risks can be
minimized if the agents that are managing individuals’ capital at a distance are also
themselves shareholders. -> CEO’s gets shares
DIGITAL ORGANIZATION
- An increase in knowledge-intensive work means that organizations have to employ – and
manage – different kinds of employees
, - Knowledge-intensive work, according to Alvesson’s (2004) research, depends on much subtle
tacit knowledge as well as explicit mastery. In such a situation, working according to
instruction and command will not be an effective way of managing or being managed,
especially where the employee is involved in design and other forms of creative work on a
team basis, often organized in projects.
o Tacit knowledge enables you to speak grammatically or ride a bike: you can do it but
it would be hard explaining how to a novice.
- Gig economy : participation in a labour market characterized by the prevalence of short term
contracts or freelance work as opposed to permanent jobs
- New media is a powerful source of pressure on compagnies because everybody (customers,
users, employees and suppliers) can show what they think about a strategy
HOLOCRACY: -> self-management : vertical hierarchy is replaced by group of people that is
dedicated to a project
- Make sure that you have core values that are crouwdsourced internally and refined
Algorithms are the most rational
- Human management involve emotions which emerge as a safeguard against the effects of
the separation between decision, action and consequences
- The upcoming of AI and algorithms make sure that allot of jobs are in danger
MANAGING AS SENSEMAKING
- In organizations modelled as thus, managing involves top management teams seeking to set
a common frame within which organization members, customers, suppliers, investors, and
so on, can make common sense of the organization – what it is and what it does. This is
called sensemaking
- Weick (2008) defines sensemaking as the ongoing retrospective development of plausible
images that rationalize what people are doing.
o Ongoing: we’re always trying to make sense. And is vluchtig, ervaringsgericht,
veranderen en contextgericht
o Retrospective: we make sense of something when is elapsing en we’re constantly
reviewing the data when data is additional
o Plausibel: The sensmaking is never perfect but is eerder in een voorlopige zin
o Images: try to work with models
o Rationalize: we rationalize to make it clearer and justifiable
o People: they do the sensemaking
o Doing: we do everything through thinking and action, which define one another.
Enactment = inwerktreding
- Social activity : what is the identity of the person and what kind op stories is he telling. Also
threw experience, perception and sense making
Organizations want to try and have their employees make the same sense.
o But sensemaking is an individual process
A significant part of managing is to try and cue people in similar processes of pattern making to fit
clues and cues together and make common meaning out of them. Managers create a frame, enabling
things to be connected together to make coherent sense. Once we have the frame, we can make
sense. Managing entails framing
- Framing = we decide on what is relevant from the infinite number of stimuli, behavioural
cues, sense data and information that surround us. Show what is relevant and irrelevant
- Framing occurs not only through sensemaking
o Sensgiving: attempts to influence the sensmaing of other so that others come to
accept a preferred meaning
o Sense breaking: organizational members disrupt existing sense in order to make
alternative sense
- Sensemaking has a social and cognitive element . so also a strong emotional element
,MANAGERIAL RATIONALITY
Managerialism claims managers manage on the grounds of exclusive education and the possession of
codified bodies of knowledge. (they manage because they know they can)
An ideology = a coherent set of beliefs, attitudes and opinions. The meaning is often pejorative, with
a contrast drawn between ideology and science.
- Economic rationalism argues that markets and prices are the only reliable indices of value,
delivering better outcomes than states and bureaucracies
Capital = an asset owned with the intention of delivering a return to the owner, implying a complex
set of relations of ownership and control. Is about literally liquid assets
Social capital is a metaphor : Creating a metaphor always involves the literal meaning of a phrase or
word being applied to a new context in a figurative sense. Metaphors influence the way we describe,
analyse and think about things.
- Most organization and management theorists are sceptical about the capacity of human
decision making to be utterly rational. Instead, they prefer to see people as only ever
rational within the bounds of their knowledge and ignorance; that is, they see people
characterized by bounded rationality
- Bounded rationality = producing satisfactory rather than optimally rational decisions, a
process referred to as ‘satisficing’, meaning accepting decisions that are both sufficient and
satisfying
o Just appear to be rational
- Resistance to change consists of those organizational activities and attitudes that aim to
thwart, undermine and impede change initiatives.
GLOBAL SHIFTS
The growth of artificial intelligence makes sure that projects are often globally connected.
- The global division of labour, the associated asymmetry of power relations and the social
systems hosting them are the result of an always-unfolding spatial process
They will be working in technological environments subject to rapid and radical change. They will
be globally connected, working with people remotely as well as face to face, from many different
languages, ethnicities, cultures and religions.
- Competition is based less on traditional comparative advantage as a result of what
economists call ‘factor endowments’, such as being close to raw materials, and more on
competitive advantages that arise from innovation and enterprise. Global competition goes
hand in hand with outsourcing in industries, as firms exploit technology to disaggregate
‘back-office’ routine functions and locate them in cheaper labour markets
- Diversity is increasingly seen as an asset for organizations: people with diverse experiences
can contribute more varied insights, knowledge and experience than can a more
homogeneous workforce
H2: Managing individual – seeing, being, feeling
INTRODUCTION
a ‘one size fits all’ management approach will not work. -> people are complex.
PSYCHOLOGY AT WORK
Philosophers tried to explain the nature of the self, the soul and personality
organizational behaviour = refers to the study of human behaviour in organizational contexts. OB is
an applied discipline that concerns itself with individual level, group-level and organization level
processes and practices that inhibit or enable organizational performance.
1. nature versus nurture debate. At issue is whether we are genetically encoded to be the way
we are, such that how well you achieve things in specific spheres of life will depend on your
genetic dispositions – your personality, ability to be a leader, to be caring or aggressive
2. Tabula rasa = our personality is something that is socially constructed as we learn to manage
ourselves and become the kind of self we want to be. From this perspective, we learn to
, become leaders, influenced by social contexts such as the socioeconomic status of our
families, our culture, social support systems, the environment in which we grow up, our
schooling, and so on.
Our view is that we are born with some aspects of what constitutes us as a person but that much of
who we are is learned over time and that context has a profound impact on our development as
human beings
- Evolution theory and survival of the fittest
- Self-interest = based on self-interest, which is best served by the operation of free and
unfettered markets in the supply of goods and services
o Fundamental self-interest does not necessarily provide welfare or products or services
that cannot be privately owned to generate income and so, the argument goes,
government must become involved in providing such public goods.
It is not surprising that social responsibility and economic, social and environmental sustainability
have long been perceived as the duty of government to regulate or as a task for charity and other
‘do-gooders’ -> because companies make no profit of it
PERCEPTION AT WORK
Perception= the process of receiving, attending to, processing, storing and using stimuli to
understand and make sense of our world. The stimuli can be experienced through any and all of the
senses such as sight, sound, smell, taste and touch.
Schemas are a very important component of the perceptual information processing story told above
because in many ways they underscore much of what we cover in this chapter – our values,
personality and emotions can all be linked to schemas
Schemes = Schemas are used to structure and organize information that we experience in our social
world and are often hierarchical
Schemas = the underlying constructs that contain information about our values, how we perceive
ourselves as people, how we perceive others, how we adjust and respond to change, how we
operate in our social world, and how we experience our emotions, make sense of our attitudes,
opinions, prejudices and assumptions
Person schemas = Person schemas are structures of meaning that affect thinking, planning and
behaviour concerning others. Within person schemas, there are idealized person schemas that serve
as prototypes with which we compare all other persons
Self schemas = Specific selfconceptions we hold about ourselves, which we believe are self-
descriptive and highly important to possess
- include idealized self- or projected self- (ideal self-) schemas. That is, a schema forms the
‘ideal’ type of what a person strives to be or with which they compare themselves
Script schemas = Schemas about how we operate in our world and understand and remember
information.
o Conditions : situation
o Standard roles : the actor (the ober and customer)
o Result
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