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• An organization is a social unit of people structured and managed to meet a need or pursue collective goals
• An organization has a management structure
• An organization determines relationships between different activities and members
• An organization subdivides and assigns roles, responsibilities, and authority to carry out different tasks
• Basic properties of formal organizations:

  • Formal organization is rational and has a logical foundation
  • Purposeful and goal-oriented
  • Task specialization is necessary for efficiency
  • Specialization of functions and division of labor
  • Includes general administration, production/engineering, physical distribution/warehousing, sales, marketing, and narrow job jurisdictions
• Chain of command:

  • Clear line of authority from top to bottom
  • Delegation of authority
  • Superior-subordinate relationship
  • Ensures cooperation among people as they pursue their goals
• Unity of direction:

  • Towards the goal
• Span of control:

  • Number of subordinates controlled by a single supervisor
• Organizational theories:

  • Bureaucratic
  • Human Relations
  • Systems Theory
  • Sociotechnical
• Bureaucratic structure:

  • Max Weber (1947) developed a rational, legal system of organizational structure
  • Principles of bureaucracy include division of labor, merit-based employment, chain of command, and span of control
• Human Relations structure:

  • Elton Mayo focused on interpersonal relations as the most important factor in an organization
  • Emphasizes employees as interacting social individuals
• Systems Theory structures:

  • Modern theory that views an organization as an integrated whole
  • Likens the organization to an organism constantly adapting to meet internal and external demands
  • Aims to maintain homeostasis in different parts of a system
• Open and Closed Systems:

  • Closed systems are not responsive to internal and external changes
  • Open systems are responsive to internal and external changes
• Sociotechnical Systems structures:

  • Assumes social and technological factors have equal weight in determining organizational structure
  • Management's primary task is to ensure harmony between social and technological systems
  • Problems are best handled at the lowest level possible