WWW & WWW, markets and countries were isolated. Isolation provided protection. As a result, organizations need not have to be run as businesses Greatest change is in Information Technology. Internet and networking enabled the world to become more integrated. The way we operate was revolutionized by Work of WTFO ( World Trade Organization ) has made the global and integrated National gobos have privatized public firms and deregulated industries Trading blocs have been established and have become larger e. . The European Union -? more competition for Due to the above all organization in order to survive the competition need to be managed as though they are commercial or business enterprises, 6 Definition of Business Organization world more all firms growing ferocious ” An entity that is both commercial and social, which provides the necessary trustees to achieve the central Objective Of trades in goods or services. ” 7 Why classified commercial & social as Business Organization?
High cost (Organization need to cut down high cost) Issue Of deregulation / liberation / prevarication Of industry. E. G. : hospitals, universities / educational institutes, telecommunications – greater competition Issue of globalization / rationalization – makes market forces stronger (competition). Hence all organization whether Profit / Non-profit / Public Sector simply have no choice but to operate as business organization.
All organization need to operate as business organization based on one important requisite : there must be a change in Organization Behavior 8 Organization Behavior ( B ) 4 factors affect ( B) – Culture – Structure – Processes – Management Style Changes needed in order for organizations to become business organizations, i. E. Changes must be at the following levels: – Multi Divisional – Multi Lateral – Multi Radical Management mindset must think about efficiency. More adaptable structure (organic). Policies, procedures, processes must be market savvy; there must be change in aloes, norms, behavior, attitude (culture). Economic Approaches to Organizations Dooms and Schroeder (1997) offer five economic approaches to organizations, which they note are closely related: ( we will cover this in greater detail in unit 8 of our notes Economic approaches to organizations Behavioral theory – this sees the organization as made up of different participants who each have their own interests – this is an approach that will be expanded on in the final part of this chapter Agency theory – this approach entrees on the idea of the decision-making process being delegated to an agent, whilst the principal or manager is only able to partially observe the agent Transaction cost economics (Ronald Cease)- this perspective sees transactional costs (monitoring cost, enforcing cost, negotiating cost) together with production costs as being the main factor that determines organizational forms Economic approaches to strategic management.
An example Of this is game theory 10 Future Further realization of IT World has becomes more global Freer markets – greater competition All organizations must function as business organizations (Needle) 11 Conclusion The change is imperative and inevitable to survive in uncertain 21st century. 12 Organization of the future Lurch suggests – “the essence of organizations has shifted and will shift trot focusing on structure to capability. Capability represents what the organization is able to do and how it does it rather than the more visible picture to who reports to whom and which rules govern work _ organization will operate in the future to identify and nurture a handful of critical / core capabilities”