Notes about the lectures containing information on Organizational theories and the book by Jones. Also, there are notes from Davis (2016) about digital platforms and forms of platformization.
Lecture 1
Organizations are inseparable from everyday life.
→ even when you work or study somewhere, you don’t necessarily know who leads the
organization and how success is measured and funded.
→ we often notice organizations when they d on’t work → in restaurants when food takes too
long, you want to speak to the manager.
Different kinds of organizations have similar structures → universities and hospitals → both
expert organizations led by experts.
Similar kinds of organizations can have different structures → Google and Apple → Google
based on functions, Apple more based on products (iPhone).
Understanding organizational phenomena is difficult.
Why did Nokia succeed and fail? → strategic leadership - organizational design - capabilities -
organizational environment.
Goals of the course:
- Explain basic concepts related to organizations and
organization theory and how organizations relate to
their environments.
- Evaluate how the learned theories explain different
organizational phenomena.
Materials: Jones - additional reading material - lectures -
tutorials.
Grading: OT: final exam 55% (minimum 5.50) → weekly
quizzes 5% - ongoing case study (40%).
Exam: monday 26-10 13:30-16:30 → EDUC-ALFA → open and
multiple choice.
→ including lectures, tutorials and reading material → quizzes as
support.
First quizz → deadline next monday (7-9) → 6 multiple choice
questions.
Ongoing case study (OCS): analyze organization of your choice to
link theory & practice.
→ each session: weekly report → mandatory → every monday 15:00.
Organization = tool people use to coordinate actions to obtain
something they desire/value → is a “machine”.
→ sees employees as replaceable → focus on outputs not members of
the organization → focuses on efficiency: how to get max outputs with
minimum input.
→ stems from times of industrial revolution and works of early
management scholars like Frederik Taylor.
Systemic nature of ethical breaches is not considered → corporations
are naturalized as archetypical organizations.
Corporation i s THE organization.
Why use course book:
- organizational efficiency is important for all types of
organizations.
, - Many of the theories are applicable for many types of organizations.
- It is good to get used to the lingo that the book uses because it is likely that some of
it is relevant in your working life.
Morgan’s eight metaphors for organizations.
Why do organizations exist? → see picture.
Economies of scale = make things more efficiently.
Economies of scope = when you make large variety of things,
output, you can pass off the production line → not restricted
to technology.
Transaction costs = costs associated with negotiating,
monitoring and governing exchanges between people.
→ focal theory explaining the boundaries of organizations
and has been developed by Nobel winning economist Oliver Williamson.
5 reasons for existence of organizations:
1. To increase specialization and the division of labour.
2. To use large-scale tech.
3. To manage the organizational environment.
4. To economize on transaction costs.
5. To exert power and control.
3 and 5 explain the existence of a tribe in the stone age.
3 and 5 explain the existence of the catholic church.
1, 2, 3, 4 and 5 explain the existence of the nation state of the
Netherlands.
OT: organizational decision making,
power and politics → platformization
and its effect on organizations.
OCS: analysis of organizational aspects → detailed
info → substantiated analysis → identifying strengths
and weaknesses → linking weekly theory to practice
→ weekly submissions are not graded, but basis for
feedback → feedback video will be
published in the tutorial folder each
Thursday morning.
→ peer feedback moment after fourth deadline (28
sept) for parts delivered so far → final report is
graded: deadline OT is 2 november 17:00.
Picking a case: p referable for-profit → access to
info → through personal contacts → interview
phone calls or email contact → publicly traded well reported
organization → all group members have access to info → beware of
subsidiaries and brands.
Lecture 2
THIS LECTURE: understand work of organizations’ top
management and problems arising from separation of ownership
and management → principles of stakeholder management and its
, relation to corporate power → basics of organizational ethics and why unethical behavior
occurs.
All companies have shares → even if it doesn’t mean the shares are sold to externals →
dictates who owns how much of the company.
Necessary with external shareholders to have b oard of directors → usually founders are also
shareholders → only have top management team → no separate board of directors.
CTO: chief technical officer → C IO: chief information officer → C
FO: chief financial officer.
Board of directors monitors top management’s activities.
→ within the board of directors there are inside directors.
→o utside directors are not full-time employees → major shareholders.
Under board of directors is corporate-level management:
- Has ultimate responsibility for setting company goals and objectives, for allocating
organizational resources to achieve objectives and for
designing the organization’s structure.
- Has many names → top management team, board of
management.
Top-management team: organizations under the
top-management team.
Agency theory = offers a
useful way of
understanding complex
authority relationship
between top management and board of directors.
→ agency relation arises when one person (stakeholders/
principal) delegates decision-making authority/control
over resources to another (agent/m anagers).
Creates moral hazard problem: principal finds difficult to evaluate how well agent has
performed because agent possesses info advantage.
→ agent has incentive to pursue goals and objectives different from principal’s.
Solving problem: using g
overnance mechanisms that align interests of principals and agents →
forms of control that align interests of principal and agent so both parties have incentive to
work together and maximize organizational effectiveness.
→ making managers’ rewards contingent on outcomes of their decisions.
Stakeholder theory = way to look at environment of organization → stakeholders have claim
or stake → inducement is what they get → c ontribution is what they give.
Goal conflicts = to be effective an
organization must minimally satisfy
interests of all groups that have a stake
in organization.
→p roblems that organization faces as it tries
to win approval:
- choosing which stakeholder
goals to satisfy.
- deciding how to allocate
organizational rewards to different stakeholder groups.
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