Introduction to Organizations

Introduction to
Organizations
D R S U M I TA M I S H R A
Interesting • Was founded by Marc Randolf and Reed
Hastings as a start-up in 1997 with only
Stories
30 employees and 925 titles
• Initially started with DVD sales and
rental by mail
• Streaming media and retaining the DVD
rental Blu-ray rental service
• Offered an initial IPO in 2002
• Entered content production in 2012 and
debuted with its first series Lilyhammer
• In July 2018 it has 130 million
subscribers worldwide, 5400 employees
and offices in five countries including
the country of origin-USA!
01/24/2025 INTRODUCTION 2
Interesting Stories
• Was created through a software to recognize

faces called facemash!
• Facemash opened in Harvard in 2003.
• Online directory for Harvard Students
• Part of a company called Meta Platforms
• Caused a social revolution and earned an annual

revenue of $116.61 billion in 2022.
Interesting • Began with a small laboratory
producing anti tetanus in 1967
Stories • Started manufacturing lifesaving
immune biologicals
• Manufactured affordable vaccines
like tetanus, anti-snake venom,
injectable polio etc.
• Largest vaccine manufacturer of
the world
• Played a major role during the
COVID19 pandemic
What’s common
in all of them?
1. Develop the power of an
idea
Product Innovations: Apple,
Ikea, Tesla
Process Innovations: Ford’s
assembly line, Starbuck’s
process innovation
Business Model Innovations:
Airbnb, Spotify, Google
AdWords
Why do these Service Innovation: Netflix,

Uber
organizations exist? Value Innovation: Southwest

Airlines, Nintendo
Why do these organizations exist?
2. To use large scale technology

Economies of Scale and Scope –GM, Toyota and Ford
Facebook: Scale diversification with billion users, scope diversification
by preventing multi homing on competitive platforms
3. Managing the organizational environment

Organic and Inorganic growth
Integration across the value chain
Netflix and Vertical Integration
Why do these
organizations
exist?
VA L U E C H A I N
4. To economize on transaction costs
Why do these Transaction Costs are the costs of negotiating,
monitoring and governing exchanges between
organizations people
exist? Goal of organization is to reduce the costs of

exchanging resources in the environment & costs of
managing exchanges internally
Environmental Uncertainty & Bounded
Rationality+ Opportunism & Small Numbers+
Risk & Specific Assets = Transaction Costs
Gerber Baby Foods and Fiat
Some of the • Organization is a consciously
coordinated social entity with a
Basics relatively identifiable boundary,
that functions on a relatively
continuous basis to achieve a
common goal or a set of goals
• -Social entity
• -Identifiable boundary
• -Continuing bond
• -Goal or a set of goals
Some of the
Basics
• Organization Structure
• Organization Design
• Organization Culture
• Organization Change
Interesting Stories
• Was founded in 2005 by Steve Huffman and

Alexis Ohanian.
• When it first launched, it had zero visitors, leading
the founders to create several fake accounts to
hold fake discussions until visitors eventually
started trickling in.
• Was eventually purchased by Conde Nast
• Sometimes you have to fake it to make it!
Interesting Stories
• Was founded in 1939 by Martin Goodman and saw
instant success with its creation of the Human Torch,
Sub-Mariner and Captain America.
• The company filed for bankruptcy in 1996 with the
crash of the comics market.
• Bounced back with a merger with Toy Biz and began
producing successful film franchises like Spider-Man
and X-Men.
• Was acquired by Disney in 2009 and now
encompasses TV Series and numerous films!
1. Environmental awareness
-OPEC and the oil crisis
Characteristic -Repositioning of Maggi over the years

-COVID19 and the rise of the gig economy
s of an Open 2. Feedback
System -Continuous loops of feedback

-Xerox and the Continental Story
3. Cyclical Character
Characteristics
continued….
4. Negative Entropy
-Entropy refers to propensity of
an organization to run down and
disintegrate
-Negative Entropy
-The Continental and the Pixar
Story
5. Steady State
6. Movement towards growth
and expansion
Characteristics…
7. Balance of Maintenance and
Adaptive Activities
-Maintenance activities ensure that the
various subsystems are in balance and the
system is in accord with its environment.
-Adaptive activities are necessary so that
the system can adjust over time to
variations in external and internal
demands.
8. Equifinality
Importance of • Dealing with Contingencies
Integration Strategies
Organization
Design • Gaining Competitive Advantage
• Managing Diversity
Intersectionality

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Introduction to

• Was created through a software to recognize

• Online directory for Harvard Students

• Part of a company called Meta Platforms

• Caused a social revolution and earned an annual

Why do these Service Innovation: Netflix,

organizations exist? Value Innovation: Southwest

2. To use large scale technology

3. Managing the organizational environment

exist? Goal of organization is to reduce the costs of

• Was founded in 2005 by Steve Huffman and

• Sometimes you have to fake it to make it!

Characteristic -Repositioning of Maggi over the years

System -Continuous loops of feedback

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