kieser training london review

hello, in the last couple lectures we areexploring various dimensions of change, organization and organization development and today wewill more focus on organizational theories and in next couple of lectures we will exploredifferent aspects of understanding the given organization. in this lecture, i want you to see and understandwhat are these organizational theory, organizational life cycle then we will also look at the populationecology theory, institutional theory, open systems theory, organizational subsystemsand how organization and environmental interface can be understood. we will also look at theway the or different stages of the organization can help us to increase overall organizationaleffectiveness. so the best way to start organizational

theory discussion is that organizations gothrough a series a sequence of steps stages which are predictable. so that means we tryand see the growth and development from a purely from a point of view of the organizationallife cycle as we know the life cycle has these stages of birth, growth, decline and death.so the four principal stages of the life cycle can also be applied to the organizationalsystem, so that means we construct these word as organizational life cycle. so that means we are talking about organizationalbirth, organizational growth, organizational decline as well as organizational death. inother words theories which helps us to see or help us to look at these life cycle becomesvery important. so organizations are born

as we are seeing individuals, entrepreneurscome together. so they recognize a business opportunity and to use their skills and tocreate value and create value means they are able to bring a change in the market placethrough introduction of new products or services and there are customers who pay money forsuch products and services and that is what we have theories or talking about is thiscreation of value. so the organizational birth is the most dangerous in terms of the lifecycle stage because it is associated with the greatest chance of failure so the, sothe several of the people are talking about that at the initial stage itself one needto be careful. so this population ecology theory talks aboutthe this birth as well as the next stages.

so theory 6 explain the rate at which thenew organizations take birth and also the die in a population of organizations. so thatmeans we are talking about which are those things very conducive for this birth of theorganization which are of those situations where it does not help if the organizationsto grow and contribute and also contributes for the decline of the organization. so the population ecology theory the rateof birth of new organizations in an environment they talk about increases rapidly at first.so that means you will see there are mushrooming but then it then it tapers off and there aredifferent reasons for explaining this, the shape of the curve over a period of time.

so in some situation see this they are veryconducive kind of an environment then it moves like a till you know typically like an s curvethe, then it reaches that kind of a plateau but lot of initial investments are made interms of increasing the number of organizations but some of them will grow but many of themwill decline. so the population ecologist have identified two sets of strategies thatorganizations can use to gain access to resources and increase their chances of survival. sothat means an early entrant so if you are the kind of what people talk about the firstmover advantages. so that is if you are the first then you likelythat you will have more you know survival and also kind of a late entrant strategy wherethat you do have a set of experiences of the

other people and then you can see to you knowthat where you want to do that required piggybacking and things like that. so the kind of a thingis that very specialist strategy versus the generalist strategy in terms of establishingthe organization ensuring that the survival of the organization and over a period of timeseveral books have come in terms of talking about the built to last the things like thatwhere you are trying to see how do organizations survive or contribute over a period of time. so when you are talking about this there isan institutional theory of growth that means organizational growth is the life cycle stagein which organizations develop skills and competencies that allow them to acquire additionalresources. so the institutional theory studies

that how organizations can grow and survivein a competition or in a competitive environment by satisfying the stakeholders. so the organizationsall the time meets the stakeholder expectations understands and by doing this it draws thatkind of a required energy to expand, grow and contribute. so institutional theory also argues that toincrease the chances of survival the organization adopt many of the rules and codes of conduct,the found in the institutional environment. so that means the institutional environmentis defined as the set of values and norms in an environment that govern the behaviorof organizations. so the it is able to understand it is able to relate to and then by adoptingthis, the rules and procedures it survives

and then you know the institutional theoryof growth have tried to explain this kind of a thing, organizational isomorphism isconforming because this organization are conforming to a common institutional environment. so the question is the result is somethingreferred to as organizational isomorphism, organizational isomorphism the term for thesimilarity among the organizations in a population that means if you see the code of conduct,the recruitment rules, the various practices within. so all that gets controlled why theexternal environment which also sends signals of what is correct and what is not correct.so institutional theory identifies three processes that explain that why organization becomesimilar over time. it could be the coercive

or it is also called as mimetic and also itis the kind of a normative. so coercive isomorphism is that the rules are again expectations arestated very clearly and they are severely punished for not following. so we are seeing that some of the hotels andentertainment things are to be closed by this hour. so and the business has to start aroundthis hour. so these are like very clearly laid out by the society of what is to whatis acceptable and what is not acceptable. similarly, the normative ones are the unwrittenrules but it is clarified through series of expectations but the disadvantages of theif you see that the you know the very clearly as the isomorphism leads to a kind of a stabilityand a kind of a legitimacy but it has many

disadvantages. so in other words organizations may learnways to behave the way you know what people call it as they become outdated and may nolonger they lead to the organizational effectiveness that means that they may not be creating thatkind of a value. so they exist but not perceived as anywhere or any closer to the requirementsof the customer and that is where it fails as a system of delivery. so the institutional theory, the ecologicalaspects and the earlier ones it always talks about what triggers the organizational birth,the organizational growth and also the organizational decline but the greiner went little furtherin using the word life cycle model of growth,

the greiner through life cycle model of growthproposed that organizations pass through the five stages and then each stage ends in akind a crisis and organizations respond to overcome this crisis through reorganization.so to advance from one stage to the other the organization must successfully manageand survive solve the problems associated with each of such crisis situations. i triedto explain this model quickly in the previous lectures but this one would clearly show whatgreiner’s meant in terms of the life cycle model of growth as you will see in this inthe x axis, there is this age of the organization and the age of the organization has been describedas the young as well as the mature and similarly, we will see that the stages of the of whatwe are talking about the size of the organization.

so the age and size when you see we will startfrom that the small to a large organization and at the beginning it is the small and theyoung organization, the small and the young organization means that it is basically weare talking about growth through creativity. so that means a set of you know entrepreneurwith set of people they work hard they try and meet the customer understanding, theymay not have the technology with them, they may not have the resources with them, theymay not have to competencies with them. so they work hard acquire the competenciesacquire the rule of the game acquire the resources understand the customer and try and do allthe things whatever required to meet those customers things. so the growth through creativitythe this it is always in the flux always it

is creating new value propositions and movingrapidly and brings that kind of a high energy. now let us see there if any of these thingsare not happening then the organization may gets into the kind of a decline mode at thatstage itself but then they becomes a crisis of leadership, the crisis of leadership isso yes, they have all done but now tell me what is in it for me. so people start thinking end of the 3, 4,5 years, 2 years could be in some situations, so then you know tell me i have worked hardnow what is my role what is my designation, what is this to be you know who will do whatthe kind of a things. so that means you know the you have to create an organization. soit has to have a kind of a purpose it has

to have a kind of a long-term goal it hasto have a kind of a long term goal it has to have a that kind of a structure which providesor meets the career and career aspirations. i think that is where you move through a secondstep or the second stage of growth through the direction and growth through the directionwhere the individual, individuals define the kind of a structure, individuals define thekind of the future. so they start moving around that but then since all of it is a kind ofa thing control thing it be there is a crisis of autonomy, the crisis of autonomy peoplewould like to see now why you know because probably it has become large it has now peopleknow the rules of the game so they are prepared to take the responsibilities.

so they want much more guidance than dictatingeverything step-by-step, so people are used to this set of task and set of things havegone into in terms of the standardization and that is where you see the crisis of autonomyshould be referred to through the crisis of delegation but then crisis of delegation wouldmake much more divisions much more empowered groups things like that then you move throughone more that is as these people are called so and so as the functional heads or the businessgroup heads things like that then there will be a crisis of control, the crisis of control,duplication of resources, people are not accountable to each other interdependencies are not wellmanaged as it used to happen in the first stage then it runs through an aspect of coordination,people do not know what is happening in other

divisions or in other groups. so they run in to the issues of the crisisand the crisis of this control and that has to be taken care of through the coordination.so that means newer coordination mechanisms are required and then so integrations, sowhatever call it as the the coordination or groups or the newer integrator or some fewgeneral managers positions are created so the, so growth comes through this kind ofa coordinated activity but as you put this coordination suddenly we will see there isa corporate and then there are units, different manufacturing units are controlled by thecorporate office but the corporate office defines the broad rules of the game but thespecifics are adapted by each of the divisions,

each of the units, lot of correspondence,lot of movement of papers and then the code of the code of conduct and rules of the gameand things like that it makes it much more a kind of a red tapism or what people callit as slows down and substantial time is spend in meetings and things like that. so that is the time where you feel that paperhas be replaced and with through some other mechanisms then one can think in terms ofthe growth through this kind of a collaboration. so that means you bring in more team spiritand the work on various processes within the organization. so the greiner model interestinglybrings these two combination of things, the age and the size of the organization and eachtime whatever we do it leads to another stage

of crisis another stage of another level offunctioning and that leads to an another crisis and they are talking about continuously howto manage these things. so greiner’s life cycle model of growthhas been a very interesting model to understand and the crisis can lead to the decline ofthe organization also leading to the death of the organization but successful thingsalways can lead to a better performance. so organizational decline is the life cycle stagethat enters when it fails to anticipate, recognize wide neutralize or adapt to the external orinternal pressures that threaten it is a long-term survival. as we have seen in the context ofmanaging changes in the organization there are issues where people do not understandthe drivers of the external change are not

able to meet with aspirations of the internalpeople and that is where the organization experiences this. so when organization may not be easily adaptto meet these changes in the environment suddenly when twice or technology becomes irrelevant.so the competition becomes so intense and that is the time where the organization inertiaresults from the forces inside an organization may be the aging of the workforce where peopleare not prepared to move or change into new technologies or able to work with that requiredspeed so or they do not want to without a price, we have seen happening in the textilemills. so many of the textile mills closed down because they were not able to move tothe newer technologies or able to improve

their productivity and productivity standardsand the markets when it got opened up. so there was a demand for a higher qualityoutput and also at the lesser price and many other countries who are able to supply thesame things. so the new technologies had to be deployed and unless those things were deployedwhich involved less manpower the organizations which had more manpower and not able to reducethat kind of a manpower or increase that kind of a productivity and were not able to managethe required changes in the technology and the people dimensions had to close down. sowe talk about the sickness in the organizational, sickness of the industry, the sickness isa kind of a pre-stage of the decline and the death.

so organizations becomes sick in order towhere they are not in a position to manage changes internally to meet those externalrealities and external situations. so the organizational declines occur you know occursby degrees according to what we have seen “weitzel and jonsson”. so they have identifiedfive stages of decline and management action can reverse the decline at each stage andprobably the except the last stage is of the dissolution. so each of these stages needto be understood. so the stage one they call it as a kind ofa blinded organizations are unable to recognize the internal or external problems that threatentheir long-term survival. so it could be the changes in the technology or demands of thecustomers for new product and new processes

and that is when the competitors are introducingnew products and services. so if you are blinded about those things becauseyou have a committed customers and committed people for a long period of time the organizationtakes it for granted then the stage two is a kind of an inaction, despite very clearsignals of suddenly you see that your market share is decreasing and are not able to seeyou know the it happened for many companies in the television markets when the foreigncompetition was increasing they thought as they will be able to continue because theyhave the market delusion they thought they could survive it has happened in the consumermarkets with particular television the fridge. so when samsung and lg entered many of thewell established companies they thought they

have the leadership in the market place butthen they could not go with an offensive mode but certainly they affected their long-termhealth. so despite clear signs of declining of performances the top management takes alittle attention or little action or sometimes no action so the blinded and there is an inactionand then stage three could be the faulty action. so that means you know you suddenly go ina full hog about the advertisements which may not bring the kind of a required resultsbut you has spent lot of time and rather money but with too little kind of a thing becauseyou have not introduced new technology or a new products but trying to create an impactin the market place through only advertisements. so the managers may have made the wrong decisionsor the change to little things. so the problems

of this nature and then the stage four veryclearly can be seen as a kind of a crisis by the time the stage has arrived the youknow only some radical changes in strategy and structure can stop the decline. so that means substantially you have to doa kind of a backward integration or you have to buy some new technologies because thereis no time for development or you have to recruit in a massive way to do some new thingsin the market place. so that means definitely a crisis has set in actions has little chancesof success and organization are not to assure what if done will result in what kind of whatkind of performance and that is the time where you can also see a it reaches a level of stage5 dissolution.

so a kind of a decline is irreversible andwhich the organization cannot recover. so we have seen as this had mentioned you knowthese textiles many of the textile mills resulted in this. so the old machinery the ageing ofworkforce and attitudes are very strong no money to give incentives and unless you giveincentives, no activities and by the time whatever you the things you put together youproduce a quality which is of you know where you cannot market and also you are not ina position to invest in raw material which is of high quality because you have no capacityto process such fine and costly raw materials. so in that is the stage where that you arenot in a position to focus on your suppliers not on your processers not on your peopleand the structure is ineffective and together

you know results in that kind of a sicknesswhich can what people talk about is the turnover chances are very very low. so that means you are not able to turn aroundthe organization towards any better performance. i think the important step we know the tosee the organization as a open systems and in that is where open systems theory of organizationbecomes much more useful and understanding of this will help people to redesign and refocus,open systems theory defines an organization as the as a best could be any kind of an opensocial system what is what are we talking? it consists of the patterned activities ofa group of people that tends to be goal-directed and this definition contains the 3 key elementsan open social system and a kind of a pattern

activities and it is always a goal-directedbehavior. so the all the 3 need could be elaboratedand i see that the system means a set of interrelated interdependent and interacting elements thatacquire inputs from the environment, transforms them into some form of useful outputs anddischarges them to an external environment. so that mean there is a resource interdependentthen you know the it relating where elements within the organization to convert these inputsand transformation and then continuing to the output which is back to the, so that iswhere we are talking about open systems theory as in transfer the social system. the socialsystem exist within a changing social environment that requires them to adapt to the new demands.

so that means according to this theory thatorganizations are part of the changing context of the business economic social ecologicalchanges within the society demands the or drives the changes within the organizationalsystem. so in other words all social systems are open systems so no organization can saythat they do not depend on the external things or the they can think that they can surviveand deliver the services without understanding the changes which is coming in the societalsystems. so an open system must interact with the environment to survive so that means itmust obtain resources from the environment and it must export products and services backto the environment. so whatever happens in the organization itis a simple function of the kind of changes

the kind of things happening at the largersystem or the societal system so the when we are talking about the pattern activitiesthe we can talk about what are the stable and predictable events i think that that continueto occur with regularity. so the even though we talk about organizational system is opensystems but they are not so chaotic that means you know still they have some boundaries,so that means activities are complementary and interdependent with respect to a commongoal. so that means every organization does setof activities which need to you know which meets the societal system requirements andalso the patterned activities means that they can only be viewed maybe a kind of one ata time as they occur and then you know the

for example the pattern activities in a hospitalincludes such activities as admitting patients conducting diagnostic tests performing operationsproviding health care. so that means you can see any organization does several of thesethings several of these things which can be put in a kind of a sequence and an interdependentfashion but one feeds to the to the other and the third view is that there are thereis a common goal. so when we are talking about the systems thenwhat are we talking the katz and khan defined the 10 common characteristics of open systemthat helps us to understand the concept of an organization. so we let us go through this10 characteristics to see how it is important to maintain all of these things first is theimportance of energy. so all open systems

that import some form of energy from the externalenvironment. so that means the time whatever the organizationgets creator so it is important that the in many forms it will come that means the humanresources in terms of the raw material in terms of the financial resources the statusthe recognition satisfaction or future expectation all of these things are defined externallyand then the next step is there is a throughput. so that is means the organization takes theseenergy and then gets into that kind of a transformation process or a throughput process. so the open system transforms the energy intoa product or into a service, so universities conduct classes and seminars and then educatesstudents and educated students are seen as

a kind of an output. so irrespective of whetherit is the a correctional system or it is educational system or a hospital system. so every organizationcan be view viewed as an open system, so it depends upon the energy and the resourcesto the outside elements and then second one as you know open system theory is that theyfocus on this transformation which meets some of the requirements of the society. so that means there is also an output, sothat means they produce an out an end product and a service and export it in back to theenvironment. so there is an input and there is a throughput and the and the output andsimilarly, the system has a kind of a cycle of events. so the product produced by an opensystem is again it could be recycled within

the environment and transformed into moreraw material. so that means it is not that one time of and it can come back to the systemand then you get either reeducated or you work on the same raw material to do differentthings and the another concept is a kind of a negative entropy. so the open system always means you know thereshould be possibility of more energy coming to their organization more resources comingto the organization from its environment to the organization which expands in terms ofproducing its products can store energy and it can also get into that achieve negativeentropy where it feels sometimes that in it can lift, it can survive without dependentdepending on the external changes you know

changes or external environment and similarly,we are talking about open system thing the information input the feedback understandingand the coding processes all become very relevant. so this information is necessary to help theorganization to adapt for changing environment. so that means a sensing mechanisms the clearperceptions of what is happening and the use of that external information to bring aboutinternal changes are a part of this open systems view of the organization and similarly, weare talking about the steady state and the dynamic homeostasis. so that means the organization and its andits some systems and some states must be able to maintain a kind of a state of balance andin the balancing act that means you know it

is, it is giving little more value to theto the external environment and otherwise, it gets pressured in terms of less resourcesor it may not get that kind of a required status and support from the external environment.so in other words, it is a kind of a dynamic balancing act in terms of what it uses andwhat it gives back to the to the other systems, another characteristics of this open systemis the differentiation it refers to the development of a of a specialized function or a divisionof labor. so the organization tries to so you know asit takes more resources probably whenever if they are not so environment friendly thenthey create a new group of people who will work on these new technologies or they maydo something which is a kind of example when

they cut the trees. so they may say a kindof a function which does that more and more of planting trees and forestation. so the question is that it gets into thatkind of a specialized and focus activities and it does these things to meet the kindof pressures what it gets from this environment and the ninth characteristic is about theintegration and coordination as organizations grow, they become more differentiated thenmore differentiation is required to meet the external resource acquisition and the kindof throughput activities and also the products and services it provides back to the opensystem. so then this differentiation requires somesort of coordination, so process to integrate

the various activities and making sure thatthere is no wastage of resources, wastage of activities and brining all the subsystemstogether and the other word is used this equifinality. so the concept of equifinality refers to theidea that an organization can reach the same final state from a variety of paths. so thatmeans there are different methods to achieve, so organization has the always the goal centricand also can adopt different methodologies to identify or they get into that in results.so a specific size by following different paths sometimes it can increase the capacityof the people sometimes more people can do or it can do less people with more technologyand things like that and that is where the relationship between organization as a wholeand organization subsystems becomes very necessary.

so an organization and is composed of severalsubsystems and so 5 systems, 5 or 5 subsystems that are necessary for any organization tosurvive and grow or to you know or very relevant and we can focus on those subsystems one ofthe key subsystems is this production subsystem, the production subsystem produces the productsand services of the organization and represents all the primary transformation activities. so whenever we see production subsystem itis focusing on this speed, it is focusing on the efficiency, it is focusing on the usingof the less material but giving more value and the other one is the maintenance subsystems,they are primarily concerned with maintaining the it could be the social involvement ofthe employees or making sure that the machineries

are may not kept up-to-date the older machineriesare replaced or the compensating employees have fair manner. so providing attractivebenefits making sure that task are not seen as monotonous. so creating favorable working conditions andrewarding outstanding performance to create motivation. so that the activities are performedat the expected levels, so the maintenance subsystems is equally important compared tothat what we are talking about the production subsystems then you also require the adaptivesubsystems, the adaptive subsystems activities include clearly the gathering informationabout the problems and opportunities in the environment. today, we are using this adaptivesubsystem to the next level called the bi

business intelligence, you understand thekind of customers you understand the suppliers, you understand the kind of a governing orrules and mechanisms in the society. so continuously adaptive subsystems gatherthe data and analyze these data for the organization and so developing creative innovation to helpthe organization to adapt and change. so it depending on what are the new rules of thegame, so the adaptive subsystems are also at the it helps the organization to be lookingfor newer opportunities, growth opportunities and also creating a new value to the stakeholders,customers, the suppliers and things like that then one should also talk about the supportivesubsystems. so the supportive subsystems includes twomajor functions both in terms of the procurement

as well as the disposal when we are talkingabout today the supply change management, we are really talking about the procurementsystems in fact today the arguments in the business situation is that everybody can havea locational advantages, everyone will also have a technology advantages. so what reallymatters is that the way efficiently they are able to gather the raw materials and withthe speed with which they can supply and do that required servicing. so the supportive subsystems essentially performthese roles of the procurement and and also the disposal and the what we are talking aboutprocurement activities involve securing resources and energy from the environment and the disposalincludes marketing and sales efforts to dispose

off the products not in the negative termwhat you know in terms of reaching out to the customer into the environment. so theprocurement and the disposal subsystems are so critical today because the throughput technologyall these are getting standardized and so the margins the performance things come aroundthis these two subsystems and finally, when also talks about the managerial subsystems,the managerial subsystems has the responsibility of the directing the other systems of theorganization, what we talked about the throughput, the acquiring of the resources, how theseresources should be reaching different groups in environment in terms of the disposal. so the managerial subsystem is also responsiblefor developing the organizational structure

and directing the task within the each ofthe subsystems. so together all these the 5 systems help the organization to performat different stages of its growth and the a sustenance of this growth. so the next importantthing when we need to see is that all organizations are required to interact with the environment,i think that is what is the concept of the open systems? so the interface between theorganization and its environment has great influence on the survival and effectivenessof the organization. so how does this organization can relate toor can understand. so when we see the environment, the organization environment is the you knowone can see as an infinite. however, it is to focus on specific aspects of the environmentwhat people call it as where the we have to

organizational sectors. so the eight of themost important organizational sectors are very relevant and we can discuss on thosethings. so people talk about this as the relevant environment or the specific environment orwhere the organization dependencies on the environmental elements are very high or alsoit gets influenced by these elements for its survival and for its growth, what are thoseeight elements? the human resource sector is one of the key things what people alsocall it as the labor markets. so the human resource sector includes thelabor market and the dimensions of labor market in terms of it include the sources from whichthe people will come to the organization or the potential employees. so how you can getthem it also talks about the various employment

agencies it talks about the educational systemin general the universities many of these things. so that means the organization criticallydepends on its kind of a quality and the capacities and the competencies of its you know manpower. so the when sufficient supply is not therethe organization gets affected where then you know the when sufficient supply is notthere the organization gets affected where the you know the you may not get the kindof a right people for the right job. so then organization invest in educational institutionsand then possibly contributes for restructuring of the syllabuses, restricting of the trainingprocess itself if these things cannot be done then organization has to spend much more timeand resources within the organization to transform

this human resource. so this is one of the key dependence and thesecond part is the kind of a raw material. so the raw material sector means now we aretalking about the in an university system it could be the paper, it could be the pencils,it could be the technologies you know, it could be in terms of the you know people talkabout the in an a hospital so the it is patients, it is a very wrong thing to talk about patientsas a raw material but what is important is that the from the students is a kind of araw material for the educational institutions to a patient in an hospital system, it ispurely the different kinds of materials in a manufacturing sector.

so the supply of this raw material, the consistencyand the quality of the raw material influences the overall performance of the organizationboth it is a throughput activities as well as the kind of output it talks about it satisfyingthe environment elements apart from human resource and then the raw materials, the thirdone is the financial resources. so the financial resources includes definitely the way theycan require money can be obtained the it could be the banks, it could be the loans, it couldbe the kind of savings of different people, it could be the donations, it could be thegrants it could be the kind of the financial resources which organization has to get fromthis environmental elements. the human resource, the raw materials the financial resourcesand the next one could be in terms of the

consumers and the markets. the outputs producedby the organization you know there is you are talking about the consumers, it shouldbe consumed by the customers and who purchases who pay for the goods and services of theorganization. so some are highly driven by the consumermarkets and consumer preferences for example, the fashion items the, it highly depends uponthe kind of a the market fluctuations and the market changes and similarly the fastmoving consumer durables called the fmcg’s also depends substantially on the consumerpreferences it can change and as it changes it has to provide some newer things. so theconsumer and consumer preferences in the markets is an another aspect which organizations botherand respond to. the next one is the technology

sector it includes the kind of developmentshappening within the within the particular technology domain, we have seen the kind ofcell phones. so as you have seen the new technologies areintegrated into the cell phones. so the what kind of work is going on within that the youknow if you see technologies, it could be happening in the lab level the scientificresearch centers or it could be at the universities or it could be the kind of r and d effortswithin the organization or with the similar so the technology provides another it is whatpeople are talking about a kind of a competitive edge. the next important thing is the industrysector, so the when we are using this word industry it refers to the other organizationsin the same type of business it could be the

machine tool and machine building or it couldbe in the textiles or it could be in the automotives or it could be in the agri business. so whatyou are trying to see is that what are the other organizations doing? so in the similar industry if there is lotof other people are coming into that similar industry then you are seeing a kind of a verycompetitive kind of a situation if you are only one then you know, you are in a kindof a very monopolistic state kind of a situation. so the industry sector the here we are tryingto see how many people how many organizations how many entities are doing the similar kindof activities and how many of them are in direct competition between providing extremelysimilar services and very close to the kind

of operation, what the organization is doingand the next one is the economic sector, the success and effectiveness of any organizationare influenced by the health of the overall economy. in other words, the success dependsupon the overall employment availability. so if the more growth in employment sectormeans there is more economic activity with the more economic activity with more moneysupply things like that. so for example for a machine made in company that you know thesuccess of that depends upon the automotive companies, say more you know people are buyingautomobiles then you know the success for that success for that particular organization.so more automotive for buying means it then there must be more money supply, so that meansmore employment must be there. so the more

employment demands that an influence in thehousing and similar things. so the question is that each of the sector in the economyfeeds to the other. so a booming economy is one kind of a situation or a an economy withrecessionary kind of a tendencies where money supply is less the people are not in a positionto buy. so consumers are very careful there are holdingand the holding on to the kind of wealth whatever they have and then you see there is not muchof an economic activity and people use this word like the word stagnation or recession.these things do influence the performance of the organization and the other importantthing is the government sector. so this sector includes the federal, the state as well asthe local laws which influences the regulatory

aspects, it could the allocation of the landor it could be the shift hours or it could be the employment or certain categories ofpeople. so many of these things through influenceand what people also use this word government as well as the political system and the politicalaction and committees we are seeing suddenly brings pressures on the organization and itmay create an opportunity or it may seriously inhabit the opportunities before the organization.so in government sector when the government we are talking about the policies and practicesnot only of the local governments but at the state as we have seen in terms of the languagein terms of the employment of the local persons or the federal laws about the taxation orabout the kind of exchange rates and things

like that which can economic as well as thegovernment factors can affect the performance of the organization. so in this kind of a thing the what is importantis the boundary-spanning roles, the activities that occur in buffering departments are oftenreferred to as this boundary-spanning roles. so basically to scan the environment and interpretthe details of the environment to the organization, so to gather and process the information aboutthe changes what is happening in the environment and then to represent the organization byproviding proper information and the details to the others. so this is where the two importantactivities of the boundary-spanning and to deal with environmental uncertainty that managersdo not have sufficient information most of

the time. so they have to take very cleardecisions to make the organization effective. so that is where the there is kind of a riskand one needs to talk about the risk and uncertainties and organizations have to take actions tomake this more effective and it is sometimes they are very difficult to compute the costof these things. so that is where the extents to reach the whole external environment issimplest or simple or complex and you know the whether the events are stable or unstable.so dynamic static or simple or complex it defines the how organization can respond to. so the complexity refers to the number ofexternal elements that are relevant to the organization a simple environment where theorganization interacts with only one small

with one a very small number of external elementsbut in a complex thing it is dealing with several stakeholders which may influence theperformance of the organization. so complex environment must interact with a large numberof diverse external elements and then and then the it always tries to have that kindof a stability. so the external stability refers whether the elements of the environmentare dynamic and constantly changing or whether they are stable, stable means the rate ofchange is slow. we will explain on these things further butessentially what we have covered in this session is we have talked about organizational theoryparticularly, the open systems theory, organizational subsystems and how organization environmentalinterface gets defined and in the next session,

we will continue our discussion on the howto reduce these uncertainties and how organizational theory helps in terms of increasing the organizationaleffectiveness and how organizations can achieve its goals and various types of goals and thedifferent approaches to measure these organizational effectiveness from resource acquisition, transformation,output, recycling, consistency and also we will talk about organizational climate andorganizational culture and the organizational theory helps us to get this overall pictureor the functioning of the organization in its different forms.