Organization theory
Lecture 1: 25 – 10 – 2021
Whetten, D. A. (1989). What Constitutes a Theoretical Contribution? Academy of Management
Review, 14(4), 490–495.
Sutton, R. I., & Staw, B. M. (1995). What theory is not? Administrative Science Quarterly, 40(3), 371–
384.
Mayer, K. J., & Sparrowe, R. T. (2013). Integrating Theories in AMJ Articles. Academy of Management
Journal, 56(4), 917–922
Organization theory course: what is it about?
• What is theory (not)?
• Organization theory i n the OT course is:
> Organization is the level that we will study, level of analysis
> Theories explain and increase understanding of aspects of organizations. For example:
-Why do organizations exist? Why doe we have those organizations? We are now in an
organization. Why are there organizations?
-How doe organizations set goals? How do these goals come about? i.e. dynamic capability
theory, goal setting theory. > goals setting
-What makes organizations different? How can we explain this? How outcompete organizations
each other? Dynamic capability theory will deal with this.
-When and why do organizations collaborate? Power of other organizations, we need knowledge.
OT Learning goals
• To reproduce correctly definitions of the main concepts
• To reproduce and explain the main assumptions
• To reproduce, explain and apply baseline conceptual models and advanced models on
selected topics. Conceptual model = concepts are combined with arrows.
• To correctly formulate the main hypotheses, and the arguments grounding these
hypotheses
• To read and understand academic papers that empirically test these theories
How will we reach these goals? Content
• Five theories:
1. Goal-setting theory, GST
2. Social interdependence theory, SIT
3. Dynamic capabilities theory, DCT
4. Legitimacy theory, LT
5. Inter-organizational theory, IOT
3 work groups.
Exam
• Multiple choice
• True/false
• Open questions: answer is given, explain why it is the correct answer
,Exercise
1. The problem of this company is that employees are working in their own interest, this results
in products recall which brings costs. It is about the different goals people have (goals
setting).
2. Goal interdependence: the extent into which the achievement of a goal is hindered or
facilitated by other goals.
The achievement of one goals is hindered by the other goal between quality and low costs.
3. Negative and positive goals interdependence.
Positive goal interdependence: the achievement of goal 1 facilitates the realization of goal 2
Negative goal interdependence: the achievement of goal 1 hinders the realization of goal 2.
4. Negative goal interdependence induces rivalry between departments in organizations, and
consequently hampers collaboration.
5. What could the CEO do to the change the negative impact of the bonus trap?
• Prioritise goals
• Create a common goal
• Theory can help you creating an informed decision
Six blind man and the elephant story
• It is about different perspectives
Patial truths
The organization is like:
• A sales department
• A purchase department
• Quality management
• Production
Not a generalized picture.
To see and understand an elephant, a integrative view is needed
• Add elements to explain parts of the organization, why do they exist?
• Why all organizations look the same? Or there are mutations?
• Only when you add/combine the goal achievement/bonuses at the level of the
organization, we can observe the goal interdependencies and their organizational
effects.
You need an integrative view
• Only when you add up:
• Humans
• Division of power
• Teams, departments, business units, projects
• Management
• Manufacturing, purchasing
• Product
• An environment
• Et cetera
You have a full organization + synergetic effects
Common wisdom and policy theories
• Everyday we work with personal and policy theories
• Ex1: women are smarter than men are
, • Ex2: in health once a widespread belief among both consumers and medical
professionals was that smoking cigarettes was not risky behavior. (personal)
• Ex3: if government subsidizes the salary costs R&D workers, firms’ innovation will go up.
(policy)
The challenge with theory
• We need an integrated AND a focused view
• Most people contrast practice with theory, AND prefer examples over theories. It is
about generalizability in same conditions. This is difficult to generalize contexts! Theory
in that way is also practice, it is a way to understand practice and organizations.
• BUT: practice, as we saw in our case, suffers form partial views that hinder more
complete observations, and thus (better) observations.
What is organization?
What is theory?
• 5 theories that answer 6 separate questions
Core concepts: Organizations
• System of people working together
• They have a goal
• Human beings
• Collaboration
• Goals
Organizations:
1) Social entities that
• Aim is to reach social goals, not only economic goals.
• Social = interaction between human beings
• Psychological = inside of the individual
2) Are goal directed
• Everyone has different goals
3) Are designed as deliberately structured and coordinated activity systems, and…
• They are not a family, there is a boss and workers
• Functional departments, designed in the most optimal way to reach that goals.
• Coordination of goals of different departments.
4) Are linked to distinct external environments.
• First, we saw them as closed system, now we see them as open systems.
• Open innovation: collaboration between parties.
Types of organizations?
• Non-profit / profit
• Public (owned by the government) / private (privately owned by owner or shareholder)
• Government organizations / non-governmental organization = NGO (Rode Kruis, Green
Peace, Amnesty international)
• Voluntary organizations
• Resistance movements
• Criminal organizations
= an organized group of people who have a common goal and work together
Organization VS. Organizations = collaboration between organizations is an organization.
I.E. collaboration between health care organization. (GGZ Friesland, Chris and Agape)
I.E. The Human Variome project
I.E. Virtual teams, working together across the globe.
, Lecture 2: 27 -10 – 2021
Whetten, D. A. (1989). What Constitutes a Theoretical Contribution? Academy of Management
Review, 14(4), 490–495.
Sutton, R. I., & Staw, B. M. (1995). What theory is not? Administrative Science Quarterly, 40(3), 371–
384.
Mayer, K. J., & Sparrowe, R. T. (2013). Integrating Theories in AMJ Articles. Academy of Management
Journal, 56(4), 917–922.
Core concepts: organizations
Organizations:
1) Social entities that
2) Are goal-directed
3) Are designed as deliberately structured and coordinated activity systems, and
4) Are linked to distinct external environments
This lecturer is devoted to the paper of Whetten: basics.
New organizational forms
Hybrid organization:
• 2 logics
• I.e. profit logic and social logic (goals)
• Competing logics = hybrid organization
Alliances:
• Collaborations between legally independent organizations
• I.e. Phillips, Douwe Egberts, Senseo collaboration > they are still legally independent
• This can create specific problems: no natural boss (3 independent bosses)
• Often two organizations, which can be extend in networks (goal directed networks)
• Collaboration is needed and be goal directed together which create a goal directed network
Project-based organizations:
• I.e. producing cars which is a production line
• Organizations who do only do projects
• Projects are temporary (months, 1 or 2 years or more)
• Totally new coordination problems when switching in projects
• Think out of organizational box
Theory: A definition
• A theory consist of a set of interrelated concepts, definitions, and propositions that explain
or predict events or situations by specifying relations among variables
• The word ‘’theorise’’ comes from the Greek word ‘’theorein’’, which consitsts of a blend of
two words, ‘’thea’’ which means to see or observe, and ‘’horan’’ which means to see a thing
attentively or to contemplate it.
• Social science: a good theory explains something. You want to explain the phenomenon by
factors. if you do that systematically, we call that a theory. Theory is parsimonious: we want
to have those factors that explain most and best predictors. The rest is a little bit of noise.
We do not want huge models, but small models which explain it = parsimonious models.
• Theory is a product of the mind or what we have observed in practice. We contemplate
about it and on the basis of that we build theory.
Lecture 1: 25 – 10 – 2021
Whetten, D. A. (1989). What Constitutes a Theoretical Contribution? Academy of Management
Review, 14(4), 490–495.
Sutton, R. I., & Staw, B. M. (1995). What theory is not? Administrative Science Quarterly, 40(3), 371–
384.
Mayer, K. J., & Sparrowe, R. T. (2013). Integrating Theories in AMJ Articles. Academy of Management
Journal, 56(4), 917–922
Organization theory course: what is it about?
• What is theory (not)?
• Organization theory i n the OT course is:
> Organization is the level that we will study, level of analysis
> Theories explain and increase understanding of aspects of organizations. For example:
-Why do organizations exist? Why doe we have those organizations? We are now in an
organization. Why are there organizations?
-How doe organizations set goals? How do these goals come about? i.e. dynamic capability
theory, goal setting theory. > goals setting
-What makes organizations different? How can we explain this? How outcompete organizations
each other? Dynamic capability theory will deal with this.
-When and why do organizations collaborate? Power of other organizations, we need knowledge.
OT Learning goals
• To reproduce correctly definitions of the main concepts
• To reproduce and explain the main assumptions
• To reproduce, explain and apply baseline conceptual models and advanced models on
selected topics. Conceptual model = concepts are combined with arrows.
• To correctly formulate the main hypotheses, and the arguments grounding these
hypotheses
• To read and understand academic papers that empirically test these theories
How will we reach these goals? Content
• Five theories:
1. Goal-setting theory, GST
2. Social interdependence theory, SIT
3. Dynamic capabilities theory, DCT
4. Legitimacy theory, LT
5. Inter-organizational theory, IOT
3 work groups.
Exam
• Multiple choice
• True/false
• Open questions: answer is given, explain why it is the correct answer
,Exercise
1. The problem of this company is that employees are working in their own interest, this results
in products recall which brings costs. It is about the different goals people have (goals
setting).
2. Goal interdependence: the extent into which the achievement of a goal is hindered or
facilitated by other goals.
The achievement of one goals is hindered by the other goal between quality and low costs.
3. Negative and positive goals interdependence.
Positive goal interdependence: the achievement of goal 1 facilitates the realization of goal 2
Negative goal interdependence: the achievement of goal 1 hinders the realization of goal 2.
4. Negative goal interdependence induces rivalry between departments in organizations, and
consequently hampers collaboration.
5. What could the CEO do to the change the negative impact of the bonus trap?
• Prioritise goals
• Create a common goal
• Theory can help you creating an informed decision
Six blind man and the elephant story
• It is about different perspectives
Patial truths
The organization is like:
• A sales department
• A purchase department
• Quality management
• Production
Not a generalized picture.
To see and understand an elephant, a integrative view is needed
• Add elements to explain parts of the organization, why do they exist?
• Why all organizations look the same? Or there are mutations?
• Only when you add/combine the goal achievement/bonuses at the level of the
organization, we can observe the goal interdependencies and their organizational
effects.
You need an integrative view
• Only when you add up:
• Humans
• Division of power
• Teams, departments, business units, projects
• Management
• Manufacturing, purchasing
• Product
• An environment
• Et cetera
You have a full organization + synergetic effects
Common wisdom and policy theories
• Everyday we work with personal and policy theories
• Ex1: women are smarter than men are
, • Ex2: in health once a widespread belief among both consumers and medical
professionals was that smoking cigarettes was not risky behavior. (personal)
• Ex3: if government subsidizes the salary costs R&D workers, firms’ innovation will go up.
(policy)
The challenge with theory
• We need an integrated AND a focused view
• Most people contrast practice with theory, AND prefer examples over theories. It is
about generalizability in same conditions. This is difficult to generalize contexts! Theory
in that way is also practice, it is a way to understand practice and organizations.
• BUT: practice, as we saw in our case, suffers form partial views that hinder more
complete observations, and thus (better) observations.
What is organization?
What is theory?
• 5 theories that answer 6 separate questions
Core concepts: Organizations
• System of people working together
• They have a goal
• Human beings
• Collaboration
• Goals
Organizations:
1) Social entities that
• Aim is to reach social goals, not only economic goals.
• Social = interaction between human beings
• Psychological = inside of the individual
2) Are goal directed
• Everyone has different goals
3) Are designed as deliberately structured and coordinated activity systems, and…
• They are not a family, there is a boss and workers
• Functional departments, designed in the most optimal way to reach that goals.
• Coordination of goals of different departments.
4) Are linked to distinct external environments.
• First, we saw them as closed system, now we see them as open systems.
• Open innovation: collaboration between parties.
Types of organizations?
• Non-profit / profit
• Public (owned by the government) / private (privately owned by owner or shareholder)
• Government organizations / non-governmental organization = NGO (Rode Kruis, Green
Peace, Amnesty international)
• Voluntary organizations
• Resistance movements
• Criminal organizations
= an organized group of people who have a common goal and work together
Organization VS. Organizations = collaboration between organizations is an organization.
I.E. collaboration between health care organization. (GGZ Friesland, Chris and Agape)
I.E. The Human Variome project
I.E. Virtual teams, working together across the globe.
, Lecture 2: 27 -10 – 2021
Whetten, D. A. (1989). What Constitutes a Theoretical Contribution? Academy of Management
Review, 14(4), 490–495.
Sutton, R. I., & Staw, B. M. (1995). What theory is not? Administrative Science Quarterly, 40(3), 371–
384.
Mayer, K. J., & Sparrowe, R. T. (2013). Integrating Theories in AMJ Articles. Academy of Management
Journal, 56(4), 917–922.
Core concepts: organizations
Organizations:
1) Social entities that
2) Are goal-directed
3) Are designed as deliberately structured and coordinated activity systems, and
4) Are linked to distinct external environments
This lecturer is devoted to the paper of Whetten: basics.
New organizational forms
Hybrid organization:
• 2 logics
• I.e. profit logic and social logic (goals)
• Competing logics = hybrid organization
Alliances:
• Collaborations between legally independent organizations
• I.e. Phillips, Douwe Egberts, Senseo collaboration > they are still legally independent
• This can create specific problems: no natural boss (3 independent bosses)
• Often two organizations, which can be extend in networks (goal directed networks)
• Collaboration is needed and be goal directed together which create a goal directed network
Project-based organizations:
• I.e. producing cars which is a production line
• Organizations who do only do projects
• Projects are temporary (months, 1 or 2 years or more)
• Totally new coordination problems when switching in projects
• Think out of organizational box
Theory: A definition
• A theory consist of a set of interrelated concepts, definitions, and propositions that explain
or predict events or situations by specifying relations among variables
• The word ‘’theorise’’ comes from the Greek word ‘’theorein’’, which consitsts of a blend of
two words, ‘’thea’’ which means to see or observe, and ‘’horan’’ which means to see a thing
attentively or to contemplate it.
• Social science: a good theory explains something. You want to explain the phenomenon by
factors. if you do that systematically, we call that a theory. Theory is parsimonious: we want
to have those factors that explain most and best predictors. The rest is a little bit of noise.
We do not want huge models, but small models which explain it = parsimonious models.
• Theory is a product of the mind or what we have observed in practice. We contemplate
about it and on the basis of that we build theory.
