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1 Organization Theory, Design, and Change – Seventh Edition – Gareth R. Jones and the Lecture OTD Stefan Spanjer
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2 Chapter 1 Organizations and organizational Effectiveness Organization A tool people use to coordinate their actions to obtain something they desire or value. Entrepreneurship The process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs Value creation takes place at three stages: input (raw materials, money, human resources, information and knowledge), conversion (machinery, computers, human skills and abilities) and output (finished goods, services, dividends value for stakeholders) ! Organization’s Environment (customers, shareholders, suppliers, distributors, government and competitors) Organization environment The set of forces and conditions that operate beyond an organization’s boundaries but affect its ability to acquire and use resources to create value. * The way the organization uses human resources and technology to transform inputs into outputs determines how much value is created at the conversion stage. The amount of value the organization creates is a function of the quality of its skills, including its ability to learn from and respond to the environment . Economies of scale Cost savings that results when goods and services are produced in large volume on automated production lines. Economies of scope Cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across different products or tasks. Transaction costs The costs associated with negotiating, monitoring, and governing exchanges between people. Organization theory The study how organizations function and how they affect and are affected by the environment in which they operate. Organization structure The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organization goals. * Once a group of people has established an organization to accomplish collective goals, organizational structure evolves to increase the effectiveness of the organization’s control of the activities necessary to achieve its goals. * The principal purpose of organizational structure is one of control: to control the way people coordinate their actions to achieve goals and to control the means used to motivate people to achieve these goals. Organizational culture The set of shared values and norms that controls organizational members’ interactions with each other and with suppliers, customers, and other people outside the organization.
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3 Organizational design The process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve it goals. Organizational design is about how and why various means are chosen.
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