CHAPTER -FOUR
OPEN SYSTEMS DESIGN ELEMENTS
Contents of chapter
The external environment.
Inter-organizational Relationships.
Organization size and life cycle and design/structure.
Comparative management
The external environment.
•In a broad sense the environment is infinite and includes
everything outside the organization.
• However, the analysis presented here considers only those
aspects of the environment to which the organization is
sensitive and must respond to survive.
•Thus, organizational environment is defined as all elements
that exist outside the boundary of the organization and have
the potential to affect all or part of the organization.
General Environment
It includes those sectors that might not have a direct
impact on the daily operations of a firm but will
indirectly influence it.
The general environment often includes the
government, sociocultural, economic conditions,
technology, and financial resources sectors.
These relationships ultimately help managers
change their role from top-down management
to horizontal management across organizations.
Con`t------
Relationships among organizations can be
characterized by whether the organizations are
dissimilar or similar and whether relationships are
competitive or cooperative.
By understanding these perspectives, managers
can assess their environment and adopt
strategies to suit their needs.
perspectives:
first perspectives is called dependence theory
Which describes rational ways organizations
deal with each other to reduce dependence
on the environment.
• The second perspective is about collaborative
networks, where in organizations allow
themselves to become dependent on other
organizations to increase value and productivity
for all.
Con`t----
The third perspective is population ecology,
which examines how new organizations fill
niches left open by established organizations
and how a rich variety of new organizational
forms benefits society.
The final approach is called institutionalism
and explains why and how
organizations legitimate themselves in the
larger environment and design structures by
borrowing ideas from each other e sectors
affect all organizations eventually. Example
resource dependence
Resource Dependence:
Represents the traditional view of relationships
among organizations.
Resource-dependence theory argues that
organizations try to minimize either dependence on
other organizations for the supply of
important resources and try to influence the
environment to make resources available.
Organizations succeed by striving for independence
and autonomy.
Cont. …
It will be through a variety of strategies.
One strategy is to adapt to or alter the
interdependent relationships.
This could mean purchasing ownership in
suppliers, developing long-term contracts or
joint ventures to lock in necessary resources, or
building relationships in other ways.
When threatened by greater dependence,
organizations will assert control over external
resources to minimize that dependence.
