Org Theory Textbook Terms

Question 1

organization

Answer 1

a tool people use to coordinate their actions to obtain something they desire or value

Question 2

entrepreneurship

Answer 2

the process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs

Question 3

organizational environment

Answer 3

the set of forces and conditions that operate beyond an organization’s boundaries but affect its ability to acquire and use resources to create value

Question 4

economies of scale

Answer 4

cost savings that result when goods and services are produced in large volume on automated production lines

Question 5

economies of scope

Answer 5

cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across different products or tasks

Question 6

transaction costs

Answer 6

costs associated with negotiating, monitoring, and governing exchanges between people

Question 7

organizational theory

Answer 7

the study of how organizations function and how they affect and are affected by the environment in which they operate

Question 8

organizational structure

Answer 8

the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals

Question 9

organizational culture

Answer 9

the set of shared values and norms that controls organizational members interactions with each other and with suppliers, customers, and other people outside the organization

Question 10

organizational design

Answer 10

the process by which managers select and manage aspects of structure and culture so that an organization can control the achieve necessary to achieve its goals

Question 11

organizational change

Answer 11

the process by which organizations redesign their structures and cultures to move from their present state to some desired state to increase their effectiveness

Question 12

contingency

Answer 12

an event that might occur and must be planned for

Question 13

competitive advantage

Answer 13

the ability of one company to outperform another people its managers are able to create more value from the resources at their disposal

Question 14

core competences

Answer 14

managers skills and abilities in value-creating activities

Question 15

strategy

Answer 15

the specific pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors

Question 16

external resource approach

Answer 16

a method managers use to evaluate how effectively an organization manages and controls its external environment

Question 17

internal systems approach

Answer 17

a method that allows managers to evaluate how effectively an organization functions and resources operate

Question 18

technical approach

Answer 18

a method managers use to evaluate how efficiently an organization can convert some amount of organizational resources into finished goods and services

Question 19

official goals

Answer 19

guiding principles that the organization formally states in its annual report and in other public documents

Question 20

missions

Answer 20

goals that explain why the organization exists and what it should be doing

Question 21

stakeholders

Answer 21

people who have an interest, claim, or stake in an organization, in what it does, and in how well it performs

Question 22

inducements

Answer 22

rewards such as money, power, and organizational status

Question 23

contributions

Answer 23

the skills, knowledge, and expertise that organizations require of their members during task performance

Question 24

authority

Answer 24

the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources

Question 25

chain of command

Answer 25

the system of hierarchical reporting relationships in an organization

Question 26

hierarchy

Answer 26

a classification of people according to authority and rank

Question 27

line role

Answer 27

managers who have direct responsibility for the production of goods and services

Question 28

staff role

Answer 28

managers who are in charge of a specific organizational function such as sales or R&D

Question 29

top-management team

Answer 29

a group of managers who report to the CEO and COO and help the CEO set the company's strategy and its long-term goals and objectives

Question 30

divisional managers

Answer 30

managers who set policy only for the division they head

Question 31

functional managers

Answer 31

managers who are responsible for developing the functional skills and capabilities that collectively provide the core competences that give the organization its competitive advantage

Question 32

agency problem

Answer 32

a problem in determining managerial accountability that arises when delegating authority to managers

Question 33

self-dealing

Answer 33

managers who take advantage of their position in an organization to act in ways that further their own self-interest

Question 34

governance mechanisms

Answer 34

the forms of control that align the interests of principal and agent so both parties have the incentive to work together to maximize organizational effectiveness

Question 35

stock-based compensation schemes

Answer 35

monetary rewards in the form of stocks or stock options that are linked to the company's performance

Question 36

ethical dilemma

Answer 36

the quandary people experience when they must decide whether or not they should act in a way that benefits someone else. even if it harms others and isn't in their best interest

Question 37

ethics

Answer 37

moral principles or beliefs about what is right or wrong

Question 38

environment

Answer 38

the set of forces surrounding an organization that have the potential to affect the way it operates and its access to scarce resources

Question 39

organizational domain

Answer 39

the particular range of goods and services that the organization produces and the customers and other stakeholders it serves

Question 40

specific environment

Answer 40

the forces from outside stakeholder groups that directly affect an organizations ability to secure resources

Question 41

global supply chain management

Answer 41

the coordination of the flow of raw materials, components, semifinished goods, and finished products around the world

Question 42

general environment

Answer 42

the forces that shape the specific environment and affect the ability of all organizations in a particular environment to obtain resources

Question 43

environmental complexity

Answer 43

the strength, number, and interconnected of the specific and general forces that an organization has to manage

Question 44

environmental dynamism

Answer 44

the degree to which forces in the specific and general environments change quickly over time and thus contribute to the uncertainty an organization facest

Question 45

environmental richness

Answer 45

the amount of resources available to support an organizations domain

Question 46

resource dependence theory

Answer 46

the theory that argues the goal of an organization is to minimize its dependence on other organizations for the supply of scarce resources in its environment and to find ways of influencing them to make resources availablie

Question 47

symbiotic interdependencies

Answer 47

interdependencies that exist between an organization and its suppliers and distributors

Question 48

competitive interdependencies

Answer 48

interdependencies that exist among organizations that compete for scarce inputs and outputs

Question 49

reputation

Answer 49

a state in which an organization is held in high regard and trusted by other parties because of its fair and honest business practices

Question 50

cooptation

Answer 50

a strategy that manages symbiotic interdependencies by neutralizing problematic forces in the specific environment

Question 51

interlocking directorate

Answer 51

a linkage that results when a director from one company sits on the board of another

Question 52

strategic alliance

Answer 52

an agreement that commits two or more companies to share resources to develop a new joint business opportunity

Question 53

network

Answer 53

a cluster of different organizations whose actions are coordinated by contracts and agreements rather than through a formal hierarchy of authority

Question 54

keiretsu

Answer 54

a group of organizations, each of which owns shares in the other organizations in a group, that work together to further the groups interests

Question 55

joint venture

Answer 55

a strategic alliance among two or more organizations that agree to jointly establish and share ownership of a new business

Question 56

collusion

Answer 56

a secret agreement among competitors the share information for a deceitful or illegal purpose

Question 57

cartel

Answer 57

an association of firms that explicitly agree to coordinate their activities

Question 58

third-party linkage mechanism

Answer 58

a regulatory body that allows organizations to share information and regulate the way they compete

Question 59

transaction costs

Answer 59

the costs of negotiating, monitoring, and governing exchanges between people

Question 60

transaction cost theory

Answer 60

a theory that states the goal of an organization is to minimize the costs of exchanging resources in the environment and the costs of managing exchanges inside the organization

Question 61

specific assets

Answer 61

investments, in skills, machinery, knowledge, and information that create value in one particular exchange relationship but have no value in other exchange relationships

Question 62

outsourcing

Answer 62

the process of moving a value creation activity that was performed inside an organization to outside where it is done by another company

Question 63

tall organization

Answer 63

an organization in which the hierarchy has many levels relative to the size of the organization

Question 64

flat organization

Answer 64

an organization that has few levels in its hierarchy relative to its size

Question 65

principle of minimum chain of command

Answer 65

an organization should choose the minimum number of hierarchical levels consistent with its goals and the environment in which it operates

Question 66

span of control

Answer 66

the number of subordinates a manager directly manages

Question 67

bureaucracy

Answer 67

a form of organizational structure in which people can be held accountable for their actions because they are required to act in accordance with rules and standard operating procedures

Question 68

rational-legal authority

Answer 68

the authority a person has because of his or her position in an organization

Question 69

role conflict

Answer 69

the state of opposition that occurs when two or more people have different views of what another persona should do and as a result, they make conflicting demands on the person

Question 70

role ambiguity

Answer 70

the uncertainty that occurs for a person whose tasks or authority are not clearly defined

Question 71

managemnet by objectives (MBO)

Answer 71

a system of evaluating subordinates on their ability to achieve specific organizational goals or performance standards to meet operating budgets

Question 72

empowerment

Answer 72

the process of giving employees throughout an organization the authority to make important decisions and to be responsible for their outcomes

Question 73

self-manged teams

Answer 73

work groups consisting of people who are jointly responsible for ensuring that the team accomplishes its goals and who are empowered to lead themselves

Question 74

cross functional teams

Answer 74

formal work groups of employees from across an organizations different functions that are empowered to direct and coordinate the value-creation activities necessary to complete different programs or projects

Question 75

contingent workers

Answer 75

workers who are employed for temporary periods by an organization and receive no indirect benefits such as health insurance or pensions