Professional Documents
Culture Documents
Organisation Theory
CONCEPTS AND CASES
5e
Stephen Robbins Neil Barnwell
Chapter six
Organisation size
Size
Organisation size is normally measured by the number of employees Other measures may include geographic spread, turnover or market capitalisation For organisation theory purposes, an organisation may be considered large if it has over 2000 members
Size
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Blau and Shoenherr advocated that as size increases, structural differentiation also increases but at a decreasing rate
Size
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Size
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The Aston group found that size was associated with greater specialisation and formalisation Critics claim these studies have:
It is also difficult to separate size from the effects of technology and strategy
Large size
Large size magnifies management challenges Problems experienced are:
Growth of bureaucracy Turning information into knowledge Adapting to changing technologies Extended timeframes for action Need for accurate costing information Managing over a wide geographic spread Bounded rationality and difficulties in decision making
Large size
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Divisionalisation Outsourcing Balancing centralisation/decentralisation Structuring to facilitate change Ensuring all tasks have someone responsible for them Physically separating the different types of work
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Small size
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Small size
continued:
Tends to have a broader scope There are fewer layers of management Decision making is centralised There is less geographic dispersion
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Downsizing
Downsizing is the planned reduction of positions within an organisation The reasons for downsizing include
Increased competition Computerisation and automation Changes in strategy Erosion of economies of scale Rise in outsourcing Declining profitability Structural changes Changing roles of middle management
Robbins, Barnwell: Organisation Theory 5e 2007 Pearson Education Australia
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Downsizing
continued:
Lower overhead costs Less bureaucracy Faster decision making Smoother communication Greater entrepreneurship Increased productivity
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Downsizing
continued:
Ineffective downsizing practices can have a long lasting negative effect upon the organisation including
Lowered morale Skills shortages Productivity losses Loss of rapport between managers and workers Loss of corporate memory and organisational learning deficits
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Discussion questions
What structural and management differences would you expect to find in a large organisation, which you would not find in a small one? Compare and contrast working in a large organisation with working in a small one. Discuss the challenges of managing a large organisation, such as Shell, Nestle or Toyota. Identify poor downsizing practices and discuss the effect that these can have upon an organisation.
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