Organiza(on Size, Life Cycle, and Decline

part.

Organiza(on Theory and Design Twel%h Edi+on Richard L. Da%

Organiza+on Size: Is Bigger Be=er? Pressures for Growth

–  Industry consolida+on, global expansion, and diversifica+on have made firms grow

– Size enables companies to take risks Dilemmas of Large Size

– Large organiza+ons can get back to business more quickly following a disaster

– Large companies are standardized, mechanis+c, and complex

– Small companies are flexible and responsive – Many companies want a big company/small- company hybrid

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Differences Between Large and Small Organiza+ons

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Stages of Life Cycle Development

•  Entrepreneurial Stage- company is created Crisis: need for leadership •  Collec(vity Stage- iden+fying with the mission Crisis: need for delega1on •  Formaliza(on Stage- use of rules/procedures Crisis: too much red tape •  Elabora(on Stage- collabora+on/teamwork Crisis: need for revitaliza1on

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Organiza+onal Life Cycle

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Organiza+on Characteris+cs During Four Stages of Life Cycle

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What is Bureaucracy? •  Weber defined bureaucracy as ─ a threat to liberty ─ the most efficient system for organizing ─ ra+onal control ─ a new form of organiza+on •  Bureaucracy includes:

– Rules and standard procedures – Clear tasks and specializa+on – Hierarchy of authority – Technical competence

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Weber’s Dimensions of Bureaucracy

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Size and Structural Control

•  Formaliza1on – rules, procedures, and wri=en documenta+on

•  Centraliza1on – level of hierarchy with authority to make decisions

•  Personnel Ra1os – clerical and professional support staff ra+os

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Percentage of Personnel Allocated to Administra+ve and Support Ac+vi+es

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Bureaucracy in a Changing World •  Bureaucracy worked for the industrial age •  The system no longer works for today’s challenges

•  Organiza+ons face new challenges and need to respond quickly

•  Over-bureaucra+za+on is evident in the inefficiencies of large U.S. government organiza+ons

•  Narrowly defined jobs and rules limit crea+vity, flexibility, and rapid response

•  Organiza+ons use temporary structures for crises 11

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Approaches to Bus+ng Bureaucracy

•  Google uses bullpen sessions every a%ernoon

•  Small geographic based teams •  Increasing authority of workers

•  The increasing professionalism of employees is a=acking bureaucracy

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Three Organiza+onal Control Strategies

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Examples of Rules at a Yacht Club

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Organiza+onal Decline and Downsizing

The decrease of an organiza+on’s resources over +me is caused by:

– Organiza+onal atrophy

– Vulnerability

– Environmental decline or compe++on Downsizing refers to inten+onally reducing the size of a company’s workforce

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Stages of Decline and the Widening Performance Gap

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Downsizing Implementa+on

Establish Criteria for future work needs

Search for Alterna+ves

Communicate more not less

Provide assistance to displaced workers

Help the survivors thrive

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Design Essen+als vOrganiza+ons experience pressures to grow v Organiza+ons evolve through stages of the life-cycle v Larger organiza+ons usually adopt bureaucra+c characteris+cs

v All organiza+ons require systems for control v Many organiza+ons experience decline

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