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Organisation Theory Summary
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Organisation TheoryBlock 1: introduction
Information video 1: Major societal shifts affecting contemporary
organizations:
Social inequality: is a global problem
- Income is a global problem for inequality:
- 70% of global population only own less than 3% of global total wealth
- 0.7% of the global population on the other hand own almost half of
total wealth
- The rich and well educated people get richer and better educated
- The poor and less educated people only get poorer and less educated
- The agro-food sector has a very unsustainable carbon footprint (important in
Netherlands
- This gives big negative impact on third world countries
Is social inequality a problem: two ‘main’ arguments
1. Inequality exists but it is not that big of a problem:
a. Inequality serves to motivate entrepreneurial and innovative actions → it is
a drive for motivation
i. Poor people get more inventive
ii. When you are under pressure you often come up with the best ideas
b. Reducing inequality too much will decrease the economic efficiency
c. With too little inequality people will be less motivated to give their best
i. Therefore the society in its whole will use their resources inefficiently
d. Trickle-down economics will reduce inequality quasi-naturally
i. The rich get richer → they will spend more → that will lead to an
effect where the whealth will reach the other 99%
2. Inequality in societies has been shown to reduce trust in others and state
institutions:
a. Inequality reduces trust and therefore it is bad
b. Inequality increases social unrest
i. There are more protests in nations with high levels of social inequality
c. Inequality reduces political consensus within a society
i. With greater inequality the needs of the rich and the poor will be
different → no consensus on where the whole society should go to
d. Inequality can be dangerous because it can become self-reinforcing
The grand challenges: massive social and environmental issues that have potential or
actual negative effects on a large number of people, communities and the planet as a whole
- For Profit organizations are increasingly held accountable for their contribution or the
harm that they do to the society as a whole
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, - Becomes visible in increasing pressure on For Profit organizations to do
Triple-Bottom line reporting
- Other signs of pressure: CSR programs, climate-smart organizing and
diversity programs
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
- Environment where organizations have to act quick and where strategies can not be
planned for the next couple years
- It becomes more important for organizations to be able to adapt quickly, be agile
- It becomes less important to have a well thought-out plan
- When a plan is well thought-out you will have to put a lot of time and
resources in the research that is needed to come up with the plan
Millennials and zoomers rising: the two most relevant generations of employees and
consumers in this day and age
- They have characteristic needs and wants: tech-savvy, work-life balance, longing
for safety and purpose → (not afraid to change jobs when they don’t find this),
assertive
- They are in short supply: we live in a world that is getting older
- Contemporary organizations need to be prepared to win the war for talent:
purpose-ful jobs, cater to highly diverse work-life balance needs, good opportunities
Information video 2: The world of contemporary organizations
Digital technology that changes organizations:
Platform-based business models:
- Business model: the value proposition that the organization makes to its customers
- The basic rationale on how to make money with products
- Can be high in transaction costs
- Transaction costs: the total costs of making an transaction possible
- Digital technology can lower these costs, therefore allowing platform-based
business models
- 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
Open innovation:
- Digital technology has reduced the costs and complexity of developing new products
- This has increased the pressure to remain innovative for organizations
- A solution is to open up the innovation process to new groups in the hope of
accelerating this process
2
,The Gig economy: a labour market characterised by the prevalence of short term contracts
or freelance work as opposed to permanent jobs
- Most workers are legally self employed
- Digital technology enables broad resources to spot contracts between platform owners
and service providers
- The Uber app
- This new, relaxter, relationship makes organizational boundaries more diffuse
- Requires new HR and management practices
The rise of self-management: the opposite of what, for example Uber, is doing
- Uber uses digital technology as a means to control and enforce rules the platform
owners have to sign
- In self-managing organizations digital technology is used to empower employees to
design and change the rules in such a way that they work best for them
- Digital technology makes it possible to keep everyone informed and allows people to
connect and elaborate in the virtual space
- Can help to search in large databases
Business Process Management(BPM): is an umbrella term for various methods to discover,
measure, model, analyse, optimize and automate business processes using digital tools
- Can be used for the purchased pay process: the process through which employees
can order utilities and resources from their companies supplies
- Successful BPM implementations: have shown to lead to large increases in the
efficiency of core processes in the organizations
Information video 3: global shifts
Economic globalization: process of economic integration of countries, through the
increasing flow of goods, services, capital and labour
Globalization leads to:
- Equal distribution of wealth and knowledge
- Increase in life expectancy
- decrease of infant mortality rate
- increase in productivity
Globalization also leads to:
- Majority of the wealth goes from poor to rich countries
- Some countries benefit more than other (westen countries)
Global production:
- Does not take place in a vacuum
- It is embedded in macro-institutional structures and asymmetrical distributions
of power and wealth
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, Consequences of globalization for western organizations:
- Shifts in tasks and skills
- Shifts in working relationships
- Shifts in composition of workforce
- Shifts in means of communication
- Shifts in management
Information video 4: perception at work
Perception: the process of receiving, attending to, processing, storing and using stimuli to
understand and make sense of our world.
Basic information-processing model of perception:
Person schemas: 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
- Also: self-schemas, script schemas, social schemas, role schemas
Perception and common errors:
- Stereotyping: the process of grouping objects into simplistic categories based on
one’s generalized perceptions of those objects
- Self-fulfilling prophecy: refers to the process by which a person who holds a belief
or expectation, irrespective of its validity, causes it to come true because they behave
and act as if it is true
- Halo effect: if we connect certain good characteristics to a person in one situation
based on one trait, we tend to apply those characteristics to that person in other
situations and to other traits as well
- Devil effect: refers to generally connecting negative interpretations of people based
on one negative trait in one situation
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