The first chapter of the book gives an insight on the need to critically evaluate the structure, operations and people in an organization with an aim of developing a thematic way of successfully running the organization to profitability, growth and employee loyalty and satisfaction. The chapter begins with a case scenario of Xerox, a once successful manufacturer of copier machines. The case traces the origins of the company and the success of one of its initial product, the Xerox copier, and how the company developed within its ranks a system of recruiting and developing employee loyalty as enshrined in its vision statement then. It then traces the decline of the company from the late twentieth century to early twenty first century, and identifies increased completion from smaller but more innovative firms, the fast pace of technological development and the complacency by the company’s management in adopting these new technologies as some of the reasons for the company’s decline.
The author builds from the case of Xerox to identify the need to evaluate the workings of an organization to ensure that it avoids management ethical mistakes that could be detrimental to its viability, large size bureaucracies and the dealing of its associated problems by managers, the appropriate use of power and politics by managers, the management of internal conflicts and the development of a corporate culture that is needed to ensure that innovation thrives in the organization and change is embraced positively (Daft 5).
Several challenges facing the modern organization as it strives for success are identified. Globalization has forced firms to operate in more complex environments involving employees, markets and laws from different parts of the world and hence different cultures. It is thus imperative that organizations develop means of dealing with each of the cultures to ensure continued success. Intense competition has also been identified as another challenge facing organizations and thus the need to develop comprehensive strategies of dealing with competition to avoid decline. The issues of observance of ethics and social responsibility by organizations has also been identified as a challenge to organizations since ethical mistakes committed by members of an organization can be costly to the organization both in the short run and long in the face of increased regulation of corporations. Speed and responsiveness of the organization to changes in its internal and external environments, embracing of technology and dealing with diversity are also pointed out by the author as challenges that the organizations need to deal with and hence the need for closer study of organizational theory (Daft 10).
The second chapter of the book deals with strategy, organizational purpose and structural design. The role of management in an organization in the development of relevant goals should be based on an objective analysis of the organization’s external and internal environments. This basically involves assessing the organizations strengths and weaknesses and evaluating opportunities and threats. It is through this assessment that the top management of an organization is able to develop goals which are expressed in its mission and vision statements, which act as a stamen of strategic intent to the various organizational stakeholders such as management, employees, customers and shareholders.
In developing the strategic intent for the organization, various frameworks for selecting the strategy and design of the organization can be used. These are the Porter’s competitive forces and strategies which involve an analysis of five forces which influence the setting up of realistic goals by the organization and the Miles and Snow’s competitive forces and strategies. The Porter forces are the threat of new entrants, bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes and rivalry with existing competitors. Porter suggested the adopting of one of three strategies to deal with these forces; the adoption of differentiation, low cost leadership and focus. The Miles and Snow’s competitive forces and strategies are based on the idea that managers will seek develop strategies that are congruent with the external environment. These strategies are the prospector, the defender, the analyzer and the reactor strategies.
The management then develops the operational goals and competitive strategies which will be implemented to achieve the stated vision and mission based on the strategic intent of the organization. From the operational goals and competitive strategies develop the actual operational structures of the organization; the structural form best suited for the achievement of the operational goals, the information and control systems, the human resources policies and strategies, the production technology to be employed and the organizational culture to be observed.
An organization should also develop methods of assessing the organizational effectiveness in achieving the goals set out. This enables the identification of potential lapses in operations and structures and allows for corrective action to be taken. Internal process indicators can be used in the evaluation of the effectiveness of the organization, and involve development of strong and adaptive corporate culture and positive work climate, operational efficiency, smooth horizontal and vertical communication and growth and development of employees (Daft 79).
The balanced scorecard approach is a popular mechanism used to evaluate organizational effectiveness. It involves the evaluation of the organizational effectiveness in four broad categories; the financial effectiveness – whether the organization is achieving its financial objectives, customer satisfaction, effectiveness of internal business processes and the effectiveness of the organization in learning and growth.
Daft, Richard. Organization theory and Design. Mason: Cengage Learning, 2009. Print
Howard, Aldrich. Organizations and Environments. Englewood Cliffs: Prentice hall, 1979: Print.