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Richard L. Daft VANDERBILT UNIVERSITY

Organization Theory and Design

TENTH EDITION

Organization Theory and Design, Tenth Edition

Richard L. Daft

With the Assistance of Patricia G. Lane

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Richard L. Daft, Ph.D., is the Brownlee O. Currey, Jr., Professor of Management in the Owen Graduate School of Management at Vanderbilt University. Professor Daft specializes in the study of organization theory and leadership. Professor Daft is a Fellow of the Academy of Management and has served on the editorial boards of Academy of Management Journal, Administrative Science Quarterly, and Journal of Management Education. He was the Associate Editor-in-Chief of Organization Science and served for three years as associate editor of Administrative Science Quarterly.

Professor Daft has authored or co-authored twelve books, including Management (Cengage/South-Western, 2010), The Leadership Experience (Cengage/South- Western, 2008), and What to Study: Generating and Developing Research Questions (Sage, 1982). He also published Fusion Leadership: Unlocking the Subtle Forces That Change People and Organizations (Berrett-Koehler, 2000, with Robert Lengel). He has authored dozens of scholarly articles, papers, and chapters. His work has been published in Administrative Science Quarterly, Academy of Management Journal, Academy of Management Review, Organizational Dynamics, Strategic Management Journal, Journal of Management, Accounting Organizations and Society, Management Science, MIS Quarterly, California Management Review, and Organizational Behavior Teaching Review. Professor Daft has been awarded several government research grants to pursue studies of organization design, orga- nizational innovation and change, strategy implementation, and organizational information processing.

Professor Daft is also an active teacher and consultant. He has taught man- agement, leadership, organizational change, organizational theory, and organiza- tional behavior. He has been involved in management development and consulting for many companies and government organizations, including Allstate Insurance, American Banking Association, Bell Canada, Bridgestone, National Transportation Research Board, NL Baroid, Nortel, TVA, Pratt & Whitney, State Farm Insurance, Tenneco, Tennessee Emergency Pediatric Services, the United States Air Force, the United States Army, J. C. Bradford & Co., Central Parking System, USAA, United Methodist Church, Entergy Sales and Service, Bristol-Myers Squibb, First American National Bank, and the Vanderbilt University Medical Center.

About the Author

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Part 1: Introduction to Organizations 1 1. Organizations and Organization Theory 2

Part 2: Organizational Purpose and Structural Design 55 2. Strategy, Organization Design, and Effectiveness 56 3. Fundamentals of Organization Structure 88

Part 3: Open System Design Elements 137 4. The External Environment 138 5. Interorganizational Relationships 174 6. Designing Organizations for the International Environment 208

Part 4: Internal Design Elements 251 7. Manufacturing and Service Technologies 252 8. Using IT for Coordination and Control 294 9. Organization Size, Life Cycle, and Decline 332

Part 5: Managing Dynamic Processes 371 10. Organizational Culture and Ethical Values 372 11. Innovation and Change 410 12. Decision-Making Processes 450 13. Conflict, Power, and Politics 371

Integrative Cases 529 1.0 Rondell Data Corporation 531 2.0 It Isn’t So Simple: Infrastructure Change at Royce Consulting 539 3.0 Custom Chip, Inc. 544 4.0 “Ramrod” Stockwell 551 5.0 W. L. Gore & Associates, Inc. Entering 1998 554 6.0 Dick Spencer 569 7.0 The Plaza Inn 574 8.0 Dowling Flexible Metals 578 9.0 The Donor Services Department 582 10.0 Empire Plastics 586

Brief Contents

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11.1 Littleton Manufacturing (A) 589 11.2 Littleton Manufacturing (B) 601 12.0 Hartland Memorial Hospital (A): An Inbox Exercise 603

Glossary 613 Name Index 623 Corporate Name Index 634 Subject Index 639

vii

Contents

Chapter 1: Organizations and Organization Theory 2 Organization Theory in Action 6

Topics, 6 • Current Challenges, 7 • Purpose of This Chapter, 10

What is an Organization? 10

Definition, 11 • From Multinationals to Nonprofits, 11 • Importance of Organizations, 12

BookMark 1.0: The Company: A Short History of a Revolutionary Idea 13

Dimensions of Organization Design 14

Structural Dimensions, 15 • Contextual Dimensions, 17

In Practice: Ternary Software Inc. 18

Performance and Effectiveness Outcomes, 20

In Practice: Federal Bureau of Investigation 22

The Evolution of Organization Theory and Design 22

Historical Perspectives, 23

How Do You Fit the Design? Evolution of Style 24

Don’t Forget the Environment, 26

Organizational Configuration 26

Mintzberg’s Organizational Types, 26 • Contemporary Design Ideas, 30

Efficient Performance versus the Learning Organization 30

From Vertical to Horizontal Structure, 31 • From Routine Tasks to Empowered Roles, 31 • From Formal Control Systems to Shared Information, 33 • From Competitive to Collaborative Strategy, 33 • From Rigid to Adaptive Culture, 33

In Practice: Cementos Mexicanos 34

Framework for the Book 35

Levels of Analysis, 35 • Plan of the Book, 37 • Plan of Each Chapter, 37

Design Essentials 39

Chapter 1 Workbook: Measuring Dimensions of Organizations 40

Case for Analysis: Perdue Farms Inc.: Responding to 21st Century Challenges 41

Part 1: Introduction to Organizations 1

Part 2: Organizational Purpose and Structural Design 55

Chapter 2: Strategy, Organization Design, and Effectiveness 56

Purpose of This Chapter, 57

The Role of Strategic Direction in Organization Design 58

Organizational Purpose 60

Strategic Intent, 60

In Practice: Walgreens 61

Operative Goals, 62 • The Importance of Goals, 64B

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A Framework for Selecting Strategy and Design 65

Porter’s Competitive Forces and Strategies, 65

How Do You Fit the Design? Your Strategy/ Performance Strength 66

In Practice: Apple 68

Miles and Snow’s Strategy Typology, 70

BookMark 2.0: The Strategy Paradox: Why Committing to Success Leads to Failure (And What to Do About It) 71

How Strategies Affect Organization Design, 72 • Other Factors Affecting Organization Design, 73

Assessing Organizational Effectiveness 74

Traditional Effectiveness Approaches 75

Goal Indicators, 75 • Resource-based Indicators, 76 • Internal Process Indicators, 77

The Balanced Scorecard Approach to Effectiveness 77

Design Essentials 79

Chapter 2 Workbook: Identifying Company Strategies and Effectiveness Criteria 81

Case for Analysis: The University Art Museum 81 Case for Analysis: Airstar Inc. 84 Chapter 2 Workshop: The Balanced Scorecard

and Organizational Effectiveness 85

Chapter 3: Fundamentals of Organization Structure 88

Purpose of This Chapter, 90

Organization Structure 90

BookMark 3.0: The Future of Management 92

Information-Sharing Perspective on Structure 92

In Practice: Textron Inc. 94

Vertical Information Sharing, 94 • Horizontal Information Sharing, 95

How Do You Fit the Design? The Pleasure/Pain of Working on a Team 100

Organization Design Alternatives 101

Required Work Activities, 101 • Reporting Relationships, 102 • Departmental Grouping Options, 102

Functional, Divisional, and Geographic Designs 104

Functional Structure, 104

In Practice: Blue Bell Creameries, Inc. 105

Functional Structure with Horizontal Linkages, 105 • Divisional Structure, 106 • Geographic Structure, 109

Matrix Structure 110

Conditions for the Matrix, 110 • Strengths and Weaknesses, 112

In Practice: Englander Steel 113

Horizontal Structure 115

Characteristics, 116

In Practice: GE Salisbury 117

Strengths and Weaknesses, 118

Virtual Networks and Outsourcing 119

How the Structure Works, 120

In Practice: TiVo Inc. 120

Strengths and Weaknesses, 121

Hybrid Structure 122

Applications of Structural Design 123

Structural Alignment, 125 • Symptoms of Structural Deficiency, 125

Design Essentials 127

Chapter 3 Workbook: You and Organization Structure 128

Case for Analysis: C & C Grocery Stores Inc. 129 Case for Analysis: Aquarius Advertising Agency 132

Part 3: Open System Design Elements 137

Chapter 4: The External Environment 138

Purpose of This Chapter, 140

The Organization’s Environment 140

Task Environment, 140 • General Environment, 142 • International Environment, 143

In Practice: Univision 144

The Changing Environment 144

Simple–Complex Dimension, 145 • Stable–Unstable Dimension, 146

BookMark 4.0: Confronting Reality: Doing What Matters to Get Things Right 146

Framework, 147

Contents ix

Adapting to a Changing Environment 149

Adding Positions and Departments, 149

In Practice: Wal-Mart 149

Building Relationships, 150 • Differentiation and Integration, 152 • Organic versus Mechanistic Management Processes, 153 • Planning, Forecasting, and Responsiveness, 155

How Do You Fit the Design? Mind and Environment 155

Framework for Responses to Environmental Change 156

Dependence on External Resources 158

Influencing External Resources 158

Establishing Formal Relationships, 159

In Practice: AT&T 160

Influencing Key Sectors, 162

In Practice: eBay 163

Organization–Environment Integrative Framework, 164

Design Essentials 165

Chapter 4 Workbook: Organizations You Rely On 167 Case for Analysis: The Paradoxical Twins: Acme

and Omega Electronics 168

Chapter 5: Interorganizational Relationships 174

Purpose of This Chapter, 176

Organizational Ecosystems 176

Is Competition Dead?, 177

In Practice: Sony Corporation and Samsung Electronics Company 177

The Changing Role of Management, 179 • Interorganizational Framework, 180

Resource Dependence 181

Supply Chain Relationships, 181 • Power Implications, 182

In Practice: Amazon.com 183

Collaborative Networks 183

Why Collaboration?, 183

How Do You Fit the Design? Personal Networking 184

From Adversaries to Partners, 185

BookMark 5.0: Managing Strategic Relationships: The Key to Business Success 187

Population Ecology 188

Organizational Form and Niche, 189 • Process of Ecological Change, 189

In Practice: Axiom Global Inc. 190

Strategies for Survival, 191

Institutionalism 192

The Institutional View and Organization Design, 193 • Institutional Similarity, 194

Design Essentials 197

Chapter 5 Workbook: Management Fads 199 Case for Analysis: Oxford Plastics Company 199 Case for Analysis: Hugh Russel, Inc. 200 Chapter 5 Workshop: Ugli Orange Case 203

Chapter 6: Designing Organizations for the International Environment 208

Purpose of This Chapter, 210

Entering the Global Arena 210

Motivations for Global Expansion, 211

BookMark 6.0: The World Is Flat: A Brief History of the Twenty-First Century 211

Stages of International Development, 214 • Global Expansion through International Strategic Alliances, 215

Designing Structure to Fit Global Strategy 216

Model for Global versus Local Opportunities, 216 • International Division, 219 • Global Product Division Structure, 220 • Global Geographic Division Structure, 221

In Practice: Colgate-Palmolive Company 222

Global Matrix Structure, 223

In Practice: Asea Brown Boveri Ltd. (ABB) 224

Building Global Capabilities 225

The Global Organizational Challenge, 226

In Practice: IBM 228

Global Coordination Mechanisms, 230

Cultural Differences in Coordination and Control 233

National Value Systems, 233

How Do You Fit the Design? Are You Ready to Fill an International Role? 234

Three National Approaches to Coordination and Control, 235

The Transnational Model of Organization 237

Design Essentials 240

Chapter 6 Workbook: Made in the U.S.A.? 242 Case for Analysis: TopDog Software 242 Case for Analysis: Rhodes Industries 243 Chapter 6 Workshop: Comparing Cultures 246

x Contents

Part 4: Internal Design Elements 251

Chapter 7: Manufacturing and Service Technologies 252

Purpose of This Chapter, 255

Core Organization Manufacturing Technology 256

Manufacturing Firms, 256 • Strategy, Technology, and Performance, 258

In Practice: Printronix 259

BookMark 7.0: Inviting Disaster: Lessons from the Edge of Technology 260

Contemporary Applications 261

Flexible Manufacturing Systems, 261 • Lean Manufacturing, 263

In Practice: Matsushita Electric Industrial Company 263

Performance and Structural Implications, 264

Core Organization Service Technology 266

Service Firms, 267

How Do You Fit the Design? Manufacturing vs. Service 269

Designing the Service Organization, 270

In Practice: Home Depot Inc. 271

Non-Core Departmental Technology 272

Variety, 272 • Analyzability, 272 • Framework, 273

Department Design 275

Workflow Interdependence Among Departments 277

Types, 277

In Practice: Great Ormond Street Hospital for Children 279

Structural Priority, 280 • Structural Implications, 280

In Practice: Athletic Teams 281

Impact of Technology on Job Design 282

Job Design, 282 • Sociotechnical Systems, 283

Design Essentials 285

Chapter 7 Workbook: Bistro Technology 287 Case for Analysis: Acetate Department 288

Chapter 8: Using IT for Coordination and Control 294

Purpose of This Chapter, 296

Information Technology Evolution 296

Information for Decision Making and Control 298

Organizational Decision-Making Systems, 298 • Feedback Control Model, 299 • Management Control Systems, 300

How Do You Fit the Design? Is Goal-Setting Your Style? 301

In Practice: eBay 302

The Level and Focus of Control Systems 305

Organization Level: The Balanced Scorecard, 305

BookMark 8.0: Five Key Principles of Corporate Performance Management 306

Department Level: Behavior versus Outcome Control, 308

In Practice: Best Buy 310

Adding Strategic Value: Strengthening Internal Coordination 311

Intranets, 311 • Web 2.0 Tools, 312 • Knowledge Management, 312

In Practice: ExactTarget Inc. 314

Enterprise Resource Planning, 314

Adding Strategic Value: Strengthening External Coordination 315

The Integrated Enterprise, 315

In Practice: Corrugated Supplies 316

Customer Relationships, 318

E-Business Organization Design 319

In-House Division, 319 • Spin-Off, 319 • Strategic Partnership, 320

It Impact on Organization Design 321

Design Essentials 323

Chapter 8 Workbook: Balanced Scorecard Exercise 325

Case for Analysis: Century Medical 327 Case for Analysis: Product X 328

Chapter 9: Organization Size, Life Cycle, and Decline 332

Purpose of This Chapter, 334

Organization Size: Is Bigger Better? 334

Pressures for Growth, 334

BookMark 9.0: Small Giants: Companies That Choose to Be Great Instead of Big 335

Dilemmas of Large Size, 336

How Do You Fit the Design? What Size Organization for You? 338

Contents xi

Organizational Life Cycle 340

Stages of Life Cycle Development, 340

In Practice: Amazon 343

Organizational Characteristics during the Life Cycle, 344

Organizational Size, Bureaucracy, and Control 345

What Is Bureaucracy?, 346

In Practice: United Parcel Service (UPS) 347

Size and Structural Control, 348

Bureaucracy in a Changing World 349

Organizing Temporary Systems, 350

In Practice: The Salvation Army 351

Other Approaches to Busting Bureaucracy, 351

Bureaucracy versus other Forms of Control 352

Bureaucratic Control, 353 • Market Control, 354 • Clan Control, 354

In Practice: Southwest Airlines 355

Organizational Decline and Downsizing 356

Definition and Causes, 357 • A Model of Decline Stages, 358

In Practice: Herman Miller 359

Downsizing Implementation, 360

Design Essentials 362

Chapter 9 Workbook: Control Mechanisms 363 Case for Analysis: Sunflower Incorporated 364 Chapter 9 Workshop: Windsock Inc. 365

Part 5: Managing Dynamic Processes 371

Chapter 10: Organizational Culture and Ethical Values 372

Purpose of This Chapter, 374

Organizational Culture 374

What Is Culture?, 374 • Emergence and Purpose of Culture, 376

BookMark 10.0: Good to Great: Why Some Companies Make the Leap . . . And Others Don’t 376

Interpreting Culture, 377

Organization Design and Culture 381

The Adaptability Culture, 382

In Practice: Google 382

The Mission Culture, 383 • The Clan Culture, 384 • The Bureaucratic Culture, 384

How Do You Fit the Design? Corporate Culture Preference 385

Culture Strength and Organizational Subcultures, 385

In Practice: Pitney Bowes Credit Corporation 386

Organizational Culture, Learning, and Performance 387

In Practice: Genentech 388

Ethical Values and Social Responsibility 389

Sources of Individual Ethical Principles, 389 • Managerial Ethics, 390 • Corporate Social Responsibility, 392 • Does It Pay to Be Good?, 392

How Leaders Shape Culture and Ethics 393

Values-Based Leadership, 394 • Formal Structure and Systems, 395

Corporate Culture and Ethics in a Global Environment 398

Design Essentials 399

Chapter 10 Workbook: Shop ’til You Drop: Corporate Culture in the Retail World 401

Case for Analysis: Implementing Change at National Industrial Products 402

Case for Analysis: Does This Milkshake Taste Funny? 404 Chapter 10 Workshop: The Power of Ethics 406

Chapter 11: Innovation and Change 410 Purpose of This Chapter, 411

The Strategic Role of Change 412

Innovate or Perish, 412 • Strategic Types of Change, 413

Elements for Successful Change 415

Technology Change 417

How Do You Fit the Design? Are You Innovative? 418

The Ambidextrous Approach, 418 • Techniques for Encouraging Technology Change, 419

BookMark 11.0: Innovation: The Five Disciplines for Creating What Customers Want 422

New Products and Services 423

New Product Success Rate, 423 • Reasons for New Product Success, 424 • Horizontal Coordination Model, 424

In Practice: Threadless 426

Achieving Competitive Advantage: The Need for Speed, 427

xii Contents

Strategy and Structure Change 428

The Dual-Core Approach, 428 • Organization Design for Implementing Management Change, 429

In Practice: Hewlett-Packard 430

Culture Change 431

Forces for Culture Change, 431 • Organization Development Culture Change Interventions, 432

Strategies for Implementing Change 433

Leadership for Change, 434

In Practice: Memorial Hospital 434

Barriers to Change, 435 • Techniques for Implementation, 436

Design Essentials 438

Chapter 11 Workbook: Innovation Climate 440 Case for Analysis: Shoe Corporation of Illinois 441 Case for Analysis: Southern Discomfort 445

Chapter 12: Decision-Making Processes 450

Purpose of This Chapter, 452

Definitions 452

Individual Decision Making 454

Rational Approach, 454

In Practice: Saskatchewan Consulting 456

Bounded Rationality Perspective, 457

How Do You Fit the Design? Making Important Decisions 459

BookMark 12.0: Blink: The Power of Thinking without Thinking 461

Organizational Decision Making 461

Management Science Approach, 462

In Practice: United Airlines 463

Carnegie Model, 464 • Incremental Decision Model, 466

In Practice: Gillette Company 469

Organizational Decisions and Change 470

Combining the Incremental Process and Carnegie Models, 470 • Garbage Can Model, 470

In Practice: I ♥ Huckabees 474

Contingency Decision-Making Framework 475

Problem Consensus, 475 • Technical Knowledge about Solutions, 476 • Contingency Framework, 476

Special Decision Circumstances 478

High-Velocity Environments, 479 • Decision Mistakes and Learning, 480 • Cognitive Biases, 481 • Overcoming Personal Biases, 482

Design Essentials 483

Chapter 12 Workbook: Decision Styles 485 Case for Analysis: Cracking the Whip 485 Case for Analysis: The Dilemma of Aliesha State

College: Competence versus Need 486

Chapter 13: Conflict, Power, and Politics 490

Purpose of This Chapter, 492

Intergroup Conflict in Organizations 492

Sources of Conflict, 493

In Practice: The Purpose-Driven Church 495

Rational versus Political Model, 496

Power And Organizations 497

Individual versus Organizational Power, 498 • Power versus Authority, 498 • Vertical Sources of Power, 499 • The Power of Empowerment, 503

In Practice: Semco 504

Horizontal Sources of Power, 504

In Practice: University of Illinois 507

In Practice: Carilion Health System 509

Political Processes in Organizations 509

Definition, 510 • When Is Political Activity Used?, 511

Using Power, Politics, and Collaboration 512

How Do You Fit the Design? Political Skills 512

Tactics for Increasing Power, 513

BookMark 13.0: Influence: Science and Practice 514

Political Tactics for Using Power, 515

In Practice: World Bank 517

Tactics for Enhancing Collaboration, 517

Design Essentials 520

Chapter 13 Workbook: How Do You Handle Conflict? 522 Case for Analysis: The Daily Tribune 523 Case for Analysis: Pierre Dux 524

Contents xiii

Integrative Cases 529

1.0 Rondell Data Corporation 531

2.0 It Isn’t So Simple: Infrastructure Change at Royce Consulting 539

3.0 Custom Chip, Inc. 544

4.0 “Ramrod” Stockwell 551

5.0 W. L. Gore & Associates, Inc. Entering 1998 554

6.0 Dick Spencer 569

7.0 The Plaza Inn 574

8.0 Dowling Flexible Metals 578

9.0 The Donor Services Department 582

10.0 Empire Plastics 586

11.1 Littleton Manufacturing (A) 589

11.2 Littleton Manufacturing (B) 601

12.0 Hartland Memorial Hospital (A): An Inbox Exercise 603

Glossary 613

Name Index 623

Corporate Name Index 634

Subject Index 639

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My vision for the Tenth Edition of Organization Theory and Design is to integrate contemporary problems about organization design with classic ideas and theories in a way that is engaging and enjoyable for students. Significant changes in this edition include two new features—“Managing by Design Questions” and “How Do You Fit the Design?”—along with updates to every chapter that incorporate the most recent ideas, new case examples, new book reviews, and new end-of-book integra- tive cases. The research and theories in the field of organization studies are rich and insightful and will help students and managers understand their organizational world and solve real-life problems. My mission is to combine the concepts and mod- els from organizational theory with changing events in the real world to provide the most up-to-date view of organization design available.

DISTINGUISHING FEATURES OF THE TENTH EDITION

Many students in a typical organization theory course do not have extensive work experience, especially at the middle and upper levels, where organization theory is most applicable. Moreover, word from the field is that many students today often do not read the chapter opening examples or boxed examples, preferring instead to focus on chapter content. To engage students in the world of organizations, the Tenth Edition adds two significant features. First, “Managing by Design Questions” start each chapter to engage students in thinking and expressing their beliefs and opinions about organization design concepts. Second, a new in-chapter feature, “How Do You Fit the Design?” engages students in how their personal style and approach will fit into an organization. Other student experiential activities that engage students in applying chapter concepts are new “Book Marks,” new “In Practice” examples, and new integrative cases for student analysis. The total set of features substantially expands and improves the book’s content and accessibility. These multiple pedagogi- cal devices are used to enhance student involvement in text materials.

How Do You Fit the Design? The “How Do You Fit the Design?” feature presents a short questionnaire in each chapter about the student’s own style and prefer- ences to quickly provide feedback about how they fit particular organizations or situations. For example, questionnaire topics include: “What Size Organization for You?” “Are You Ready to Fill an International Role?” “The Pleasure/Pain of Working on a Team,” “How Innovative Are You?” and “How Do You Make

Preface

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xvi Preface

Important Decisions?” These short feedback questionnaires connect the student’s personal preferences to chapter material to heighten interest and show relevance of the concepts.

Managing by Design Questions Each chapter now opens with three short opinion questions that engage students in clarifying their thoughts about upcoming material and concepts. These questions are based on the idea that when students express their opinions first, they are more open to and interested in receiving material rel- evant to the questions. Example questions, which ask students to agree or disagree, include:

The primary role of managers in business organizations is to achieve maximum efficiency.

Managers should use the most objective, rational process possible when making a decision.

If management practices and coordination techniques work well for a company in its home country, they probably will be successful in the company’s international divisions as well.

A certain amount of conflict is good for an organization.

As a follow-up to the three “Managing by Design” questions, each chapter contains three “Assess Your Answer” inserts that allow students to compare their original opinions with the “correct” or most appropriate answers based on chapter concepts. Students learn whether their mental models and beliefs about organiza- tions align with the world of organizations.

Book Marks “Book Marks,” a unique feature of this text, are book reviews that reflect current issues of concern for managers working in real-life organizations. These reviews describe the varied ways companies are dealing with the challenges of today’s changing environment. New “Book Marks” in the Tenth Edition include Five Key Principles of Corporate Performance Management; The World Is Flat: A Brief History of the Twenty-First Century; The Strategy Paradox: Why Committing to Success Leads to Failure (And What to Do About It); The Future of Management; Small Giants: Companies That Choose to Be Great Instead of Big; and Innovation: The Five Disciplines for Creating What Customers Want.

In Practice This edition contains many new “In Practice” examples that illus- trate theoretical concepts in organizational settings. Many examples are interna- tional, and all are based on real organizations. New “In Practice” cases used within chapters include Samsung Electronics, eBay, the Salvation Army, Axiom Global, Univision, Google, Semco, AT&T, the World Bank, Threadless, Carilion Health System, Apple, Matsushita Electric, Herman Miller, and Great Ormand Street Hospital for Children.

Manager’s Briefcase Located in the chapter margins, this feature tells students how to use concepts to analyze cases and manage organizations.

Text Exhibits Frequent exhibits are used to help students visualize organizational relationships, and the artwork has been redone to communicate concepts more clearly.

Preface xvii

Design Essentials This summary and interpretation section tells students how the essential chapter points are important in the broader context of organization theory.

Case for Analysis These cases are tailored to chapter concepts and provide a vehicle for student analysis and discussion.

Integrative Cases The integrative cases at the end of the text have been expanded and positioned to encourage student discussion and involvement. The new cases include Rondell Data Corporation; The Plaza Inn; and Hartland Memorial Hospital (A): An Inbox Exercise. Previous cases that have been retained include Royce Consulting; Custom Chip Inc.; W. L. Gore & Associates; Empire Plastics; and Littleton Manufacturing.

NEW CONCEPTS

Many concepts have been added or expanded in this edition. New material has been added on organizational configuration and Mintzberg’s organization forms; strategic intent, core competence and competitive advantage; Porter’s competitive forces and strategies; using the balanced scorecard to measure effectiveness; using strategy maps; the trend toward outsourcing; supply chain management; intelligence teams; collaborative versus operations management roles; applying Web 2.0 tools for internal and external coordination; behavior versus outcome control; execu- tive dashboards; interpreting and shaping culture through organization structures, control systems, and power systems; corporate social responsibility; values-based leadership; collaborative teams for innovation; prospect theory; groupthink; over- coming cognitive biases in decision making; and the power of empowerment. Many ideas are aimed at helping students learn to design organizations for an environment characterized by uncertainty; a renewed emphasis on innovation; public demands for stronger ethics and social responsibility; and the need for a speedy response to change, crises, or shifting customer expectations. In addition, coping with the com- plexity of today’s global environment is explored thoroughly in Chapter 6.

CHAPTER ORGANIZATION

Each chapter is highly focused and is organized into a logical framework. Many organization theory textbooks treat material in sequential fashion, such as “Here’s View A, Here’s View B, Here’s View C,” and so on. Organization Theory and Design shows how they apply in organizations. Moreover, each chapter sticks to the essential point. Students are not introduced to extraneous material or confusing methodological squabbles that occur among organizational researchers. The body of research in most areas points to a major trend, which is reported here. Several chapters develop a framework that organizes major ideas into an overall scheme.