How was the organizational theory that I had as knowledge up to now a trendy and biased one? Reading through this book made the abstracter keenly aware of it. This book is probably the first book that systematically provides the basic knowledge and theoretical framework of "business organization theory" that business people need. It is a book with excellent comprehensiveness and listability.
The present age is the "era of organization" and is said to be the "era of change." Correspondingly, various new "organizational models" are appearing without interruption. However, there is no organizational model that can be directly applied to any organization. It is necessary to examine whether the model fits your organization and, if so, what it is. In that case, the body of knowledge provided by this book will be of great help.
This book is roughly divided into three parts. Part 1 introduces a basic view of the organization. The second part deals with relatively traditional organizational issues from the perspective of organizational structure and process. Part 3 considers how organizations should be in a changing environment and discusses contemporary themes such as innovation.
Although the abstract mainly deals with Part 1, the items of Part 2 and Part 3 are also taken up as much as possible in order to utilize the systematic structure of this book. Systematic knowledge for understanding an organization and its management can be said to be a culture for living in the modern society of the age of the organization.
The main points of this book
It is essential for the establishment of an organization that the belief that there is an "organizational purpose" common to the entire organization is shared with the parties concerned in the organization. It is unique to the organization that cannot be achieved by an individual.
The essence of "communication" in an organization is to change the behavior and decision-making premises of others.
The organization must elicit a "willingness to contribute" so that members can independently solve problems. For that purpose, it is necessary to relate the purpose of the organization and the purpose of the individual by fostering a sense of unity.[Must read points!] Part 1 "Basic view of the organization"
Decision-making and constrained rationality
The present age is said to be the age of organization. What is an organization in the first place? According to business scholar Chester Barnard, an organization is defined as "a system of consciously coordinated activities and forces carried by two or more people."
This book approaches the organization from the aspect of "decision making". In organizational theory, every activity in an organization is regarded as decision making. Decision-making consists of the process of recognizing a problem, creating appropriate options for problem solving, and evaluating and selecting those options.
What must be considered here is the "constrained rationality" that human rationality has its limits. We cannot comprehensively know all the options, nor can we accurately predict the consequences of the options. An organization is a system that pursues more rational decision-making by creating a coordination mechanism based on this.
Organizational purpose Organizational establishment conditions (1)
There are three conditions for establishing an organization: organizational purpose, willingness to contribute, and communication. First of all, regarding "organizational purpose". It is essential for the formation of an organization that the belief that there is a common purpose for the entire organization is shared with the stakeholders of the organization. It is unique to the organization that cannot be achieved by an individual. In some cases, it is formulated and published in the form of a management philosophy.
In an organization, a means of achieving a higher-level goal is a "breakdown of purpose" that is a lower-level goal. Through such a "chain of purpose-means", the purpose is steadily broken down (dropped) in the order of department-department-section-individual, leading to consistent and concrete activities.
Incentives and contributions
I would like to think about the relationship between the purpose of an organization and the purpose of individual participation in the organization. First, in management organization theory, we start from the perspective that they are basically different things.
The relationship between an organization and an individual is seen as a give-and-take commutation relation, which is a pair of incentives and contributions. An "incentive" is something that an organization provides to an individual, such as financial rewards. On the other hand, "contribution" is the labor force provided by individuals to pursue the purpose of an organization. Incentives are not always financial rewards. Opportunities for career development through skill improvement can also be a great incentive for individuals.
Conditions for establishing a communication organization (2)
So what is the essence of communication in an organization? In an organization, various "divisions of labor" are carried out due to factors such as specialization. Organizations that have been "differentiated" in this way must be "integrated" again for organizational purposes. Therefore, what is important is "coordination" through communication. So to speak, it is an activity aimed at achieving consistency or aligning vectors.
The mechanism is to share "decision-making assumptions", which are important assumptions in the decision-making process, among participants. It is not limited to objective information, but also includes "value assumptions" that involve value judgment, such as the priority and purpose of issues.
Communication is not just information transmission. It can be said that the essence of communication in an organization is to change the behavior and decision-making premises of others by doing so.
One approach to proper management of communication is to "structure" the system in advance so that communication can proceed smoothly.
For example, predetermining the range of organizational members involved in decision making reduces the burden of communication. There are cases where the range is decided by hierarchical authority such as each department manager or higher, and cases where it is decided by grouping of roles such as sales and manufacturing.
Another approach focuses on the "process" of communication, such as dialogue between the top and bottom and meetings. This refers to matching the knowledge levels of information senders and receivers and deepening relationships. In addition, ingenuity in media and channel selection, and recently office layout, etc. are attracting attention from the viewpoint of smooth communication.
Willingness to contribute Organizational conditions (3)
A member's participation in an organization means that he or she has taken on some "role" as a member of that organization. A role is a bunch of expected actions (behavior expectations) tied to each position. Some of the expectations included in the role are formal and some are not.
However, due to constrained rationality, it is impossible to specify them strictly in advance. There is always room for member "discretion". And it is adjusted and changed as the work is carried out.
Fostering a sense of unity
In order to achieve its purpose, the organization must elicit a "willingness to contribute" so that members can independently solve problems. Therefore, the relationship between the purpose of the organization and the purpose of individual participation is required.
One of them is "incentive design" based on the mechanism of incentives and contributions. A typical example is a "performance-based wage system" that links the degree of achievement of short-term goals with individual financial rewards. However, since the processes of people and organizations are more complicated than this system presupposes, actual operation is not easy.
The other is to overlap the purpose of the organization and the individual. If the individual has a sense of unity with the organization and the achievement of the purpose of the organization becomes part of the purpose of the individual to continue to participate in the organization, the two will naturally overlap.
Recently, corporate athletic meet has been attracting attention again, and it can be said that this is an effort to intentionally strengthen the sense of unity. Activities such as competing for sales between sales branches work to strengthen the identification of the branch and oneself. Belonging to that organization becomes an important part of an individual's identity, which creates a willingness to contribute.
Part 2 "Organizational Structure and Process"
Organizational structures include those that are official as depicted in the organizational chart and those that occur spontaneously. Formal organizations can be vertically "hierarchized" as the organization grows, and "departmentalization" begins horizontally.
Spontaneous organizations have various social networks. Organizational networks can be divided into two types: cohesive networks and bridging networks. And now, attention is focused on the "strength of weak ties (connections)" that support the latter.
Organizational culture can also be defined as a set of implicit assumptions such as values and beliefs shared by organizational members. Such spontaneous social networks and organizational cultures are also influencing people.
The actual organization can be regarded as a hybrid of an intentionally designed rational system and an unknowingly created spontaneous system, that is, a "complex system".
Psychological and social factors such as roles, hierarchies, and rules that cannot be explained by rational systems alone act on the decision-making process in an organization.
Among them, "leadership" has attracted particular attention. Leadership means working together and motivating people for change.
As for the manifestation of influence belonging to an individual, "politics" is also greatly involved in the decision-making process. Politics are found in areas other than formal authority-based instructions, orders, and communication. There is often a process of conflict and hostility over interests between multiple actors, or "conflicts." Coordination is the key to dealing constructively with conflicts.
Part 3 "Organization in a changing environment"
Innovation and organization
Innovation has become an extremely important theme when considering organizational management in today's rapidly changing environment.
Innovation is to provide new value to society and bring economic and social benefits to the company that created it, based on a new combination of some elements. The point is that it can only be called innovation by creating "value."
The characteristics of innovation management are as follows. "Acquisition and creation of knowledge" is essential. Face high "uncertainty". A high degree of "adjustment" is required. And "building multifaceted relationships" with other organizations is the key.
Constant change in routines
Organizations need to continue to change in order to create innovation. Let's look at this from the perspective of an organizational routine.
"Routine" refers to patterns of decision making and behavior. It also includes organizational structures such as rules and procedures, behavioral patterns such as organizational culture, values, and customs. There are "explicit side" and "executive side" in the routine. And there are various improvisational differences in the latter. Routines may seem like symbols of things that don't change, but they actually contain the potential for change.
Some of the differences that occur in the performance are weeded out only once, while others are retained. It can be an opportunity to make new differences in the execution of subsequent routines.
The essence of organizational change is the change through the "evolutionary process" of these routines. And, just as mutations occur during the evolution of living organisms, positive feedback of differences can cause tissues to undergo "jumping changes."
In recent years, the importance of vision and mission has been increasingly talked about. That's because visions and missions justify efforts that don't necessarily lead to short-term results.
Setting a vision and mission as an organization is nothing but a redefinition of purpose. In order to define a vision or mission that is a higher-level goal that includes the previous goals, we ask the identity of the organization, such as "what we are" and "what we want to be". It is essential to fix it.
Arousing willingness to contribute positively
From the perspective of creating innovation, creating an environment that induces proactive behavior will become more important in the future in relation to the willingness to contribute. Proactive behavior refers to the proactive behavior that an individual takes within an organization to make a difference in the future. At the other end of the spectrum is the behavior of waiting for instructions.
As organizational factors that induce proactive behavior, it is indispensable to design a job that enhances the "intrinsic motivation" of members and to foster an organizational culture with "psychological safety" that allows them to speak without hesitation.
Recommendation of reading
There are many important themes that could not be covered in the summary, such as "organizational equilibrium," which explains why companies are required to grow. I would like you to read this book.
Although this book is a textbook on university management organization theory, it is said that the people who belong to the organization are also the main readers. Although there are many basic contents, I think that the business person who actually runs the organization is the one that can find shining value. It is the knowledge that everyone wants to acquire, so that it can be said to be the knowledge infrastructure of the age of organizations. Also, the author's dialogue on the publisher's page is a great article to know the value of this book, so I recommend it.