Describe the four characteristics common to all organizations, and explain the difference between closed and open systems. They are coordination of effort (achieved through policies and rules), a common goal (a collective purpose), division of labor (people performing separate but related tasks), and a hierarchy of authority (the chain of command). Closed systems, such as a battery-powered clock, are relatively self-sufficient. Open systems, such as the human body, are highly dependent on the environment for survival. Organizations are said to be open systems.
Define the term learning organization. A learning organization is one that proactively creates, acquires, and transfers knowledge and changes its behavior on the basis of new knowledge and insights.
Describe horizontal, hourglass, and virtual organizations. Horizontal organizations are flat structures built around core processes aimed at identifying and satisfying customer needs. Cross-functional teams and empower mentare central to horizontal organizations. Hourglass organizations have a small executive level; a short and narrow middle-management level (because information technology links the top and bottom levels), and a broad base of operating personnel. Virtual organizations typically are families of interdependent companies. They are contractual and fluid in nature.
Describe the four generic organizational effectiveness criteria, and discuss how managers can prevent organizational decline. They are goal accomplishment (satisfying stated objectives), resource acquisition (gathering the necessary productive inputs), internal processes (building and maintaining healthy organizational systems), and strategic constituencies satisfaction (achieving at least minimal satisfaction for all key stakeholders). Because complacency is the leading cause of organizational decline, managers need to create a culture of continuous improvement. Decline automatically follows periods of great success preventive steps are not taken to avoid the erosion of organizational resources (money, customers, talent, and innovative ideas).
Explain what the contingency approach to organization design involves. The contingency approach to organization design calls for fitting the organization to the demands of the situation. Environmental uncertainty can be assessed in terms of social, political, economic, technological, resource, and demand factors.
Describe the relationship between differentiation and integration in effective organizations. Harvard researchers Lawrence and Lorsch found that successful organizations achieved a proper balance between the two opposing structural forces of differentiation and integration. Differentiation forces the organization apart. Through a variety of mechanisms—including hierarchy, rules, teams, and liaisons—integration draws the organization together.
Discuss Burns and Stalker's findings regarding mechanistic and organic organizations. British researchers Burns and Stalker found that mechanistic (bureaucratic, centralized) organizations tended to be effective in stable situations. In unstable situations, organic (flexible, decentralized) organizations were more effective. These findings underscored the need for a contingency approach to organization design.
Define and briefly explain the practical significance of centralization and decentralization. Because key decisions are made at the top of centralized organizations, they tend to be tightly controlled. In decentralized organizations, employees at lower levels are empowered to make important decisions. Contingency design calls for a proper balance.
Discuss the effective management of organizational size. Regarding the optimum size for organizations, the challenge for today's managers is to achieve smallness within bigness by keeping subunits at a manageable size.
