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Organizational Theory, Design, and change - Essay Example

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Name Tutor Institution Subject Code Assignment: Organizational Theory, Design, and change 1. How do organizations create value? What is the role of entrepreneurship in this process? Creating value in an organization involving the activities aimed at ensuring ultimate or absolute satisfaction to the stakeholders…
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Organizational Theory, Design, and change
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Organizational Theory, Design, and change

Download file to see previous pages... As such, it is common for organizations to improve their operations by minimizing production or operational costs for non-profit organizations. Such organizations are known to be efficient and will therefore charge low amount for their goods or services due to the low costs of production. The customers are also able to get quality services at affordable rates. Moreover, through motivation of employees, the company is able to retain loyal and efficient employees, which improves its social image within the community where it operates. Through proper social responsibility strategies, the government is able to associate with the organization and this will further enhance its image. A properly managed organization will consider an approach that will lay emphasis on initial impetus, focus, alignment, proper planning and adaptation so as to ensure value to the consumers. It is clear that entrepreneurship will set the foundation for creating value in an organization since the entrepreneur defines the goals and the tradition of the organization. They provide the initial leadership in the organization by setting the objectives and acquiring the necessary resources. The entrepreneur also establishes the management of the organization. ...
It could therefore be a conflict between the management and the investors or the management and the employees or even all employees against the investors. These conflicts could include difference in management ideologies between the management and other stakeholders, difference in targets set by different quarters of the organization and expected remuneration or reward for various achievements. In most organizations, agency problems normally occur when the management misuse the authority bestowed upon them by the other stakeholders. This is in such acts as using that authority for their own benefit at the expense of the company goals. The agency problems can be generalised as adverse selection where the investor doubts the capability of the management to promote his interest and moral hazard, where behaviour of the representative is deemed to be capable of causing harm to the organization. It is important to note that agency problem is mainly caused by mistrust and in some cases, negligence. Sadly though, the problem exists in every organization in one way or the other. Several efforts or actions are taken towards solving agency problems and they include: screening processes to reduce misbehaviour, offering incentives to the employees and management for positive results and achievements, well defined punishments for poor behaviour such as suspension and unpaid leaves to ensure strict adherence to the company’s principles. The company may even be forced to employ supervisors who are charged with the responsibility of checking such compliance. This method could be referred to as watchdog police. Other modes of solving agency problem are ...Download file to see next pagesRead More
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