OT
OT 2019
OT 2019
1. Variation
Trigger (e.g. new technology) → new business models → startup
2. Selection
- economic efficiency (profitability)
- societal acceptance (legitimacy)
"From an organization ecology perspective, it is the environment which optimizes."
3. Retention
"Knowledge of previously successful forms is institutionalized in the socialization apparatus of societies - schools, families, churches, public agencies - and in cultural beliefs and values defended by dominant organizations and institutions."
7.3 Empirical Studies (exemplary)
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Effect of Size on Organizational Failure
Hypothesis: Liability of Smallness
Small organizations have higher failure rates because of:
- lack of reliability and legitimacy
- difficulty of raising capital
- problems of recruiting and training a workforce
- higher interest payments
- costs of compliance with regulations
Empirical Test: consistent with the argument
Effect of Age on Organizational Failure
Hypothesis: Liability of Newness
Young organizations ahve higher failure rates because of:
- need to learn new roles and create routines
- limited resources
- lack of endorsement (legitimacy)
- costs of compliance with regulations
Empirical test: no effect when size is controlled
Resource Partitioning Model of Organizational Ecology
7.4 Critical Appraisal of Organizational Ecology
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Importance of the Theory (3)
- Explanation of change in population of organizations
- New perspective in organizational research (focus on populations)
- Empirically testable
Critique on Organizational Ecology Theory (3)
- Concept of population is unclear and thus it is difficult to distinguish between populations
- Empirically: Foundation of new companies is not the dominant mechanism of variation, elimination of companies is not the dominant mechanism of selection
- Influence of individuals (e.g. managers) is ignored
Summary: Organizational Ecology as Organization Theory
Module 8: New Institutionalism
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8.1 Core Concepts: Legitimacy and Institutions
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Definition of Institutions
Societal rules or expectations that are taken for granted or treated like "facts"
Definition of Legitimacy
Legitimacy is a generalized perception that structures or actions of an organization conform to the existing institutions
8.2 Institutional Environments and Organizational Structures
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Technical Environment
- Products and services are exchanged through markets
- Organizations strengthen their competitive advantage by effective controlling of work processes
Main Criteria: Efficiency
Institutional Environment
- Demonstrate conformism with institutionalised rules
- This way gain legitimacy and support from the environment
Main Criteria: Legitimacy
Combination of Technical and Institutional Environement
Matrix
Institutional Environment
strong weak
strong bank, hospitals industrial companies
weak psychiatric hospitals, churche restaurant, fitness centers
Technical Environment
Structure of the Argument
Survival of organizations: Organizations, which include in their formal structure social legitimated and rationalized elements, maximize their legitimacy, ensure the flow of resources and so improve their survivability.
Organization Theories
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Module 1: The Pluralism of Organization Theories
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1.1 Introduction
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Two Diffferent Meanings of the Term "Organization"
- Instrumental Meaning
- Institutional Meaning
Instrumental Meaning
something
- is being organized
- = activity
- = function
- has an organization
- = result
- = configuration
Institutional Meaning
something is an organization
example: NGOs, government, school, university, companies, state, family, military, sport club, church, hospital
Which aspects characterize an organization? (4)
- structure
- actor/agency
- environment
- change
1.2 Organization Theory vs. Organization Theories
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Reasons for the Plurality of Organization Theories
Different
- objects of research
- disciplinary approaches
- ideas of theory building (philosophy of science)
Function of Organization Theories: Truth vs. Insight
"insight seeking"
"What will matter is how much insight and understanding can be extracted from the entire constellation of theories"
many theories can be true and they are all providing insight (not the same) = it is good to have different theories
1.3 Organizational Research Paradigms
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Definition of "Paradigm"
"A general perspective or way of thinking that reflects fundamental assumptions about the nature of organizations"
Often several theories within the same paradigm
Fundamental assumptions (2)
- Nature of the society: regulation vs. radical change
- Nature of social science: subjective vs. objective
Paradigms of Organization Research by Burrell and Morgan (Matrix)
Modul 2: Max Weber and the Concept of Bureaucracy
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2.1 Biography and Historical Background
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Max Weber (1864 - 1920)
Significance of this work
- one of the founders of German Sociology (next to Simmel and Tönnies)
- First studies on organizations
Historical Context
- Expansion of capitalism
- Rationalization of the worldview
- Growth of the administrative machinery in public & private organizations
= Rationality: Objectivity, Impersonality, Predictability
2.2 The Concept of the "Ideal Type"
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What is NOT the concept of the "Ideal Type"? (2)
- seeking to be consistent with reality
- to be understood as a normative ideal
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Cartes-fiches
Overview of the Experiments (5)
- Illumination Experiment
- Bank Wiring Experiments
- Phase 1: Relais Assembly Test
- Phase 2: Relais Assembly Test
- Phase 3: Mica-Splitting Test
Illumination Experiments (purpose, result and interpretation)
Purpose: Effect of light intensity on workers' productivity
Result: Increased productivity of all groups
Interpretation: Effect of socio-psychological factors on workers' productivity
Phase 1: Relais Assembly Experiments (purpose, variation measured, results and interpretation)
Problematic Setup
Puropse: Effect of distribution/lenght of breaks and working hours on productivity (controlling for socio-psychological influences)
Variation measured:
- Breaks and working hours (intended)
- Change of payment plans (unintended)
- Confidence building measures (unintended)
- Change of working place to laboratory (unintended)
Result: 30% increase in output (after 2 years)
Interpretation: Increasing efficiency is primarliy explained by socio-psychological factors (but simultaneous variation of several variables)
Phase 2: Relais Assembly Experiments (purpose, variation measured, result, consequence)
Effects of Wages
Purpose: Clarifying the results of phase 1 and testing solely for the effects of payment
Variations measured: Change of payment plans
Result: Immediate increase in output of 13%
Consequence: experiment had to be terminated since the difference in payment plans between the members of the test group and "normal" workers provoked agitation.
Phase 3: Mica-Splitting Experiments (purpose, variations measured, results, interpretations)
Mica-Splitting Experiment
Purpose: Clarifying the result from phase 1
Variations measured:
- Breaks and working hours (intended)
- Change of working place (intended)
- Confidence building measures (intended)
Result: 15% increase in output (15 months)
Interpretation: max. 15% of the increase in output is caused by monetary incentives; remaining 15% of the increase has mostly socio-psychological reasons. (But task and payment plan are different from phase 1)
Summary of the Experimental Results in Three Phases
Phase 1: 30% because of all the factors (Breaks & working hours, socio-psychological factors and payment plans)
Phase 2: 13% because of the payment plans
Phase 3: 15% because of the breaks & working hours and socio-psychological factors
Bank Wiring Experiments: Group Behavior (purpose, results, consequence)
Purpose: Influence of group behavior on productivity
Result:
- Emergence of norms of appropriate daily output
- Manipulative stabilization of level of daily output
- Creation of capacity reserves
- Influence of personal relations on quality tests
Consequence: Discovery of "the informal organization"
Effect form "Informal Organizations"
Informal aspects are no longer considered solely as causing problems in the organization
Key Findings of the Hawthorne Studies (3)
Existence of a "human" organization besides the technical one:
- The organizational reality comprises more than the formal and technical structure
- Readiness to work is dependent on the "informal organizaiton" (social conventions, rules, traditions, personal relationships)
- Possibility to increase output through attention to employee's social needs
4.3 Discussion and Critique on the Hawthorne Experimens
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Accusation of (unintentional) Data Manipulation during the Experiments (2)
- Systematic mitigation of the effects of factors other than social-psychological ones (e.g. wage increase, breaks)
- "Employee-oriented leadership" is in fact not all the time as employee-oriented as declared
Secondary Data Analysis with Different Results (purpose, results, interpretation)
Purpose: Secondary data analysis on the Relais Assembly Experiments/ Phase 1
Results: Three variables explain most of the observed effects:
- Disciplinary reassured of the management
- Impact of the economic depression
- Recreation breaks
Interpretation: Socio-psychological factors and variations in wages have little effect
Ideological Bias of the Experiments
Academic objectives get mixed with the propagation of social reform
4.4 Effects and Critical Appraisal
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Effects and Consequences form the Experiments (3)
- Integration of socio-psychological factors into organization research
- Discovery of the "informal organization"
- Switch from the concept of "economic man" to the concept of "social man"
Summary: Human Relations as Organization Theory
Modul 5: Contingency Theory
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5.1 Historical Context and Theoretical Origins
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Historical Context (1960s/70s)
- Trend for empirical methods
- Higher employee qualification
- More complex organizations
- Progess of IT-systems and static software
→ Empirical analysis of organizational structures
Starting point of the Contingency Theory
Starting point is the attempt to test Max Weber's description of bureaucracy
- Experiments not applicable in context of larger structures
- Transformation to "exact and objective science
5.2 Research Interests and Assumptions
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Structure of the Argument
Research Interests: Main Questions (3)
- How can you describe and operationalize organizational structures to account for differences between organizations in empirical analysis?
- Which organizational and environmental contingencies can explain differences between organization structures?
- What effect do specific structures and environments have on the behavior of the organizational members and efficiency? Is there one particularly efficient structure for every contingency?
Hypotheses about the effects (3)
- of the situation (i.e. contingencies) on the organizational structure
- of the organizational structure on behaviour
- ot the behaviour efficiency
→ derived empirically rather than theoretically
Dimensions of internal situation (5)
- product range
- size
- production and IT technology
- legal form and ownership
- age
Dimensions of external (environmental) situation (5)
- competition
- customers
- technical progress
- society
- culture
Dimensions of Structure (6)
- Specialization (division of labour)
- Standardization (procedure directives)
- Formalization (*the files")
- Centralization (locus of authority to make decisions)
- Configuration ("shape" of the role structure)
- Coordination
Concepts of Behaviour and Efficiency
Organizational Structure → Behaviour of Members (?) → Degree of Organizational Efficiency
Operationalization of the structure's influence on behaviour and on efficiency is problematic!
5.4 Empirical Studies
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Effects of Organization's Size: increase in size (4)
- higher degree of specialization: more positions
- higher degree of coordination: greater hetrogeneity of positions
- higher degree of formalization
- lower degree of centralization
Relation between size and specialization
positive correlation between size (more employees) and specialization
Effect of Production Technology: 3 different types of production
- Degree of Specialization
- Degree of Coordination
- Coordination Mechanism
Shop Fabrication:
- Low
- High
- Personal instruction, self-determination
Assembly Line
- High
- Production: low; Divisions: high
- Program, plan
Automation
- low
- Production: low
- Personal instruction, planning, mutual adjustment
→ Production technology influences structure!
Effects of Environment (2)
Degree of heterogeneity of sub-environments + → Degree of differentiation of subsystems
Degree of integration of subsystems required by the environment + → Degree of integration between subsystems
5.5 Critical Appraisal
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Importance of the Theory and Practical Implications (4)
- Draws attention to organizational context
- Empirically testable
- Explicit attempt to generate insights for management practice
- Practical impact on organizational design → it changed against the backdrop of Contingency Theory
Critique of Contingency Theory (4)
- Important environmental and structural attributes are being neglected
- Weak explanation for adjustment of the structure of the contingencies (lack of theory)
- Neglecting the role of power and other human factors in organizations
- Conservative recommendations for organizational design
Summary: Contingency Theory as Organization Theory
Modul 6: Resource Dependence Theory
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6.1 Historical Context
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Historical Context 1970s
- Increasingly dynamic environments
- Increasing concentration of economic power
- Increasing interorganizational activities
→ Empirical analysis of organization-environment relations
