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Foundation for Organization Theories

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1. Organization, Organizational Theory, and Design

Individuals can define an organization by understanding the people that work in it. Daft

(2021) describes an organization as a goal-oriented social entity designed with deliberate

structures and coordinated activity systems that link to the external environment (p. 14). The

critical element of any organization is its people and their interactions to complete organizational

tasks that will facilitate achieving organizational goals. Other significant elements are

organization buildings and their set of policies and procedures that guide the execution of their

duties (Daft, 2021). Therefore, an organization is a structured social entity involving different

personnel working together to attain shared goals and objectives.

The organizational theory analyzes how social entities work, their patterns and

regularities, efficiency and effectiveness, and ways of improving corporate life. The concept is

paramount when identifying each organization’s correct structure, strategies, and management

frameworks (Daft, 2021). On the other hand, organization design is the configuration of a social

entity outlining the elements that make up various organizational parts and explaining how these

parts fit together for coherent executive functioning (Daft, 2021). Some critical components of

organizational theory and design are goals and effectiveness, structure, culture, change and

innovation, and an organization as an open system. Organizations are open systems because they

interact with external environments by exchanging resources. Organizational structure outlines

the official task, roles, and relationship arrangements in corporations, such as specialization and

centralization, influencing their ability to attain their goals and objectives (Daft, 2021). Culture

highlights the shared beliefs, norms, and values that shape employees’ behaviors, attitudes,

performance, and organizational identity. Therefore, organization theory and design provide
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models that help individuals understand organization dynamics and their external

interdependencies.

2. Efficiency and Effectiveness

An organization can be efficient without being effective. Effectiveness denotes the degree

to which organizations can attain their goals, whereas efficiency refers to the resource quantities

an organization requires to achieve its goals (Daft, 2021). An organization can become efficient

by utilizing the minimum input amount to derive maximum output amounts yet fail to meet some

of its goals. For instance, an organization can minimize the waste it produces, the employees

required, and the financial resources used to manufacture an electronic car. However, this

organization becomes ineffective because the manufactured electronic vehicle does not meet the

values and expectations of its consumers. Bryson (2018) argued that efficiency entails doing

organizational activities right, whereas effectiveness involves doing the right things. In this case,

the organization is efficient because it manufactured the electronic car using minimal resources

but ineffective because it does not meet customer values.

On the other hand, an inefficient organization can still be effective. It is because the

organization can produce high-quality outputs that meet its goals and those of consumers but fail

to cut on the resources it uses in the production. Effectiveness prioritizes attaining organizational

goals and increasing performance, whereas efficiency prioritizes resource optimization (Bryson,

2018). For instance, a petrol-car manufacturer will face resource restraints and operational

incompetence and utilize outdated processes but still manage to manufacture a practical electric

or hybrid car. Other factors, for instance, strong leadership, innovative employees, and market

forces, will push them to deliver the electric car. Thus, the organization is inefficient in the
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electric car manufacturing segment since it focuses on the petrol sector, but it becomes effective

because it manufactures them, meeting the values and expectations of its stakeholders.

3. Scientific Management

Fredrick Winslow Taylor pioneered the concept of scientific management. Daft (2021)

stated that the idea “emphasizes scientific job determination and management practices to

enhance labor productivity and efficiency” (p. 26). Its vital features include standardization,

incentive systems, specialization, labor division, and choosing and training personnel.

Standardization entails enforcing standard operating procedures for organizational functioning,

ensuring improved productivity by reducing inefficiencies (Merkle, 2022). Incentive systems

offer employees rewards for meeting or exceeding corporate set standards, motivating them to

work hard and smart towards meeting organizational goals. It also emphasizes choosing and

training employees to equip them with skills that will ensure they carry out their skills

effectively. It also advocates for breaking down work and assigning employees based on their

abilities facilitating operation streamlining and increased productivity.

Organizations use scientific management principles to increase their productivity and

efficiency. They use the concept to facilitate work process analysis enabling task breakdown,

time used to complete them, and most effective completion techniques. It also facilitates process

standardization, establishing the standard tools, techniques, and personnel for carrying out an

activity and ensuring consistency and variations in task completion. It also facilitates incentive

system implementations that will motivate personnel to complete their standard allocations and

meet organization objectives (Merkle, 2022). It enables linking performance with rewards

encouraging employees to work hard and increase productivity. Scientific management

facilitates the specialization of employees and the division of labor among them. It ensures that
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an organization assigns various tasks to its employees based on their skills and capabilities,

ensuring maximum leveraging of their abilities and increased effectiveness and efficiency.

Therefore, by applying its principles, organizations use scientific management to attain high

productivity, prosperity, and objectives.

#4. SWOT Analysis as a Tool for Setting Organizational Goals and Strategies

SWOT analysis thoroughly examines strengths, weaknesses, opportunities, and threats

influencing organizational performance. An organization’s top management can use this analysis

tool to develop strategies and goals for their firm. The analysis allows the administration to

identify its strengths and opportunities, allowing them to set their goals. Strengths manifest

where the organization thrives, whereas the weaknesses depict the sectors where the entity

requires improvement (Daft, 2021). When the management understands these internal factors,

they set new goals to exploit their strengths while trying to bridge their weaknesses. For instance,

an electric car manufacturer has the strength of using high technology in its production process,

which allows it to bridge the weakness of manufacturing complications and inability to meet the

demand that can affect its brand value. Therefore, the company will set its electric car production

goal liaising on its high technology prowess to alleviate manufacturing complications.

Alternatively, SWOT analysis is effective in helping the top management in developing

organizational strategies. The analysis helps identify external opportunities an organization can

exploit and threats limiting corporate progress in its ecosystem. The understanding enables the

top management to craft effective strategies that will allow the organization to align its external

environment efforts towards leveraging the opportunities and alleviate or remain prepared for

possible threats. For instance, a multinational electric car manufacturer’s opportunities include

expanding its sales into untapped markets like the Asian market. However, the top management
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will remain aware of the threat of extensive competition from other electric and alternative fuel

vehicle manufacturers. It will ensure the implementation of strategies allowing it to enter the

Asian market while cautioning itself against competition.

#5. Case Analysis

Although Millier Machine Parts and Services has managers with practical ideas about

solving their problems, they are embroiled in turmoil because of their differences concerning

company strategies. However, managers can tackle their differences by establishing effective

organizational communications that allow the collection of suggestions from different managers.

Improved communication will ensure that all managers are equipped with relevant corporate

information, for instance, finance reports to foster collaboration and eliminate misunderstandings

between the officials.

The company can also adopt an internal process emphasis that prioritizes structural

control and organizational focus. It will facilitate the formulation of a stable corporate

environment that maintains order. Daft (2021) stated that organizations that want to keep their

internal emphasis enable the meshing of multiple departmental activities to ensure high

productivity without any external environment consideration. The company managers will

observe internal emphasis, ensuring they remain orderly as they exchange divergent opinions

about organizational strategies to reach a common conclusion.

Further, the managers should consider collaborative decision-making to tackle their

strategy differences. The managers will create a forum or meeting to share different viewpoints

allowing the manufacturing vice president, finance director, and marketing director to exchange

opinions. The exchange will allow them to develop a holistic perspective toward corporate
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strategies. Further, the forum will allow them to focus on their shared goals instead of strategic

differences. Although the managers have strategic differences, they will align their shared efforts

toward increasing corporate profitability, growth, and consumer gratification. Therefore,

managers can prioritize attaining organizational goals and putting aside differences concerning

organizational strategies by making decisions collaboratively.

References

Bryson, J. M. (2018). Strategic planning for public and nonprofit organizations: A guide to

strengthening and sustaining organizational achievement. John Wiley & Sons.

Daft, R. L. (2021). Organization theory and design. Cengage learning.

Merkle, J. A. (2022). Management and Ideology: The Legacy of the international scientific

management movement. Univ of California Press.