Theory of Organization in Business and Industry: Giann Lorrenze F. Ragat MPA Student

THEORY OF
ORGANIZATION IN
BUSINESS AND INDUSTRY
Giann Lorrenze F. Ragat

MPA Student
What
What is
is an
an Organization
Organization
An organization is a consciously coordinated social

entity, with a relatively
identifiable
functions on a relatively
boundary, continuous basis
that
to achieve a
common goal or a set of goals.
What
What is
is Organization
Organization Structure?
Structure?
It defines how task are to be allocated, who reports

to whom and the formal coordination mechanisms
and interaction patterns that will be followed.
Organization structure has three components:

1. Complexity
2. Formalization
3. Centralization
1–3
Organization
Organization Theory
Theory
It is a discipline that studies the structure and design

of organizations. It describes how organizations are
actually structured and offers suggestions on how
they can be constructed to improve their
effectiveness. It studies the organization at a macro
level.
Contrasting
Contrasting Organization
Organization Theory
Theory and
and
Organization Behavior
Organization Behavior
 Organizational Behavior takes a micro view –
emphasizing individuals and small groups.
» OBfocuses on thebehavior in
organizations, employees performance, and
attitude

Organizational Theory takes a macro
perspective. Its unit of analysis is organization itself
or its primary sub
» OT units
is concerned not only with the performance
of employee and attitude but overall
organizations ability to adapt & achieve its
goals
Why
Why Study
Study Organization
Organization Theory?
Theory?
To know how organizations operate from a scientific

point of view and then use the knowledge for
constructing and changing an organizations structure
to achieve the organizations goals.
The
The Systems
Systems Perspective
Perspective
A systems perspective offers important insights into
the working of an organization.
A system is a set of interrelated and interdependent

parts arranged in a manner that produces a unified
whole.
An organization has divisions, departments and like units
separated out to perform specialized activities. At the
same time, in order to maintain unity among the
differentiated parts and form a complete whole, every
energy system has a reciprocal process of integration.
It is achieved through devices such as coordinated levels

of hierarchy; supervision, rules, procedures & policies.
Types
Types of
of Systems
Systems
Closed system. It would be the one that receives
no, enclosed, and sealed off from the outside world.
energy from an outside source and from which no
energy is released to its surroundings. A closed
system would not depend on its environment; it would
be autonomous.
Open System. An open system interacts with and

adapts to the environment by consuming resources
and exporting product and services to it. Because of
its interdependence with various elements issues
involved are more complex in nature.
Characteristics
Characteristicsof
ofan
anOpen
Open System
System
All systems have three activities—
inputs, transformation process and
outputs
1. Environment awareness
2. Feedback
3. Cyclical character
4. Negative Entropy
5. Steady state
6. Movement toward growth and
expansion
7. Balance of maintenance and adaptive
activities
Importance
Importance of
of the
the Systems
Systems Perspective
Perspective
For managers and future managers, the systems

perspective permits seeing the organization as a
whole with interdependent parts – a system
composed of subsystems.
It helps all managers to identify and

understand the environment in which their system
operates.
The
The Life
Life Cycle
Cycle Perspective
Perspective
A life cycle refers to a pattern of predictable change.

By applying it to an organization, we are saying that
their are distinct stages through which organizations
proceed, that the stages follow a consistent pattern
and that the transitions from one stage to another
are predictable rather than random occurrences.
Life Cycle Stages
1. Entrepreneurial stage. The organization is in its infancy. Goals
tend to be ambiguous. Creativity is high.
2. Collectivity stage. Organizations mission is clarified.
Communication & structure within the organization remain
informal.
3. Formalization and control stage. Organization structure is
stabilized with rules and procedures being imposed. Organization
exists beyond the presence of any one individual.
4. Elaboration of structure stage. It diversifies its products and
services in the market. Decisions are decentralized.
5. Decline stage. As a result of competition its products demands
decreases. Management looks for alternatives to sustain and
development of new product.
THANK YOU !

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THEORY OF

Giann Lorrenze F. Ragat

An organization is a consciously coordinated social

It defines how task are to be allocated, who reports

Organization structure has three components:

It is a discipline that studies the structure and design

To know how organizations operate from a scientific

A system is a set of interrelated and interdependent

It is achieved through devices such as coordinated levels

Open System. An open system interacts with and

For managers and future managers, the systems

It helps all managers to identify and

A life cycle refers to a pattern of predictable change.

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