10/14/2012

Deb Chatterjee

Organization Behavior II: designing effective organizations

Session 1: Introduction
“Organizations are not felled by their competitors. They are destroyed by internal problems”
– Mr. B M Vyas, ex-managing director of the Gujrat Cooperative Milk Marketing Federation, owners of the Amul Brand, and presently a director at Parag Mild Foods, owner of the Gowardhan and Go brands (quoted in Dibyendy Ganguly, “who moved my cheese”, in Brand Equity, The Economic Times, 2nd March 2011, page 1).

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Open systems model

Organization Input Conversion process Output

Implications of Open systems model
• • • • • • Measuring effectiveness Stakeholder and environment management Aligning members Defining boundary Achieving coordination Organizational change

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Organizational effectiveness
External resource approach Secure resources
Cost & quality of inputs Market share Stakeholder support

Internal resources approach Innovation and responsiveness
Decision time Innovativeness Employee motivation, coordination, conflict Time to market

Technical approach Conversion efficiency
Product quality & cost Customer service Delivery time

Ethical decisions
• Is it for the greater good? The utilitarian approach
– If no – reject

• If yes: Does it protect the rights of those affected by the decision? The moral rights approach
– If no – reject

• If yes: Does it distribute benefits and harm equitably? The justice approach
– If no – reject – If yes – Accept this decision

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Problem of aligning members to organizational goals through adequate control mechanisms

AGENCY THEORY

Salient aspects
• Applicable whenever there is a Principal-Agent relationship
– Board structure & compensation – More generally – boss/subordinate

• Core assumptions
– Self-interest – Goal conflict –