Chapter 11

Communities of Practice

groups of employees who work together, learn from each other, and develop a common understanding of how to get work accomplished

Norms

unwritten rules that define appropriate employee attitudes and behaviors in employees' day-to-day work and interactions.

Organizational Culture

The collectively shared values and norms of an organization's members; a key building block of organizational design.

Open Innovation

A framework for R&D that proposes permeable firm boundaries to allow a firm to benefit not only from internal ideas and inventions, but also from external ones. The sharing goes both ways: some external ideas and inventions are insourced while others are spun out.

Founder Imprinting

A process by which the founder defines and shapes an organization's culture, which can persist for decades after his or her departure.

Matrix Structure

An organizational structure that simultaneously groups people and resources by function and by product.

Centralization

Degree to which decision-making authority is restricted to higher levels of management in an organization.

Artifacts

Elements that allow corporate culture to be expressed, such as via the design and layout of physical space, symbols, vocabulary, what stories are told what events are celebrated and highlighted, and how they are celebrated.

Strategic Control-and-Reward System

Internal-governance mechanisms put in place to align the incentives of principals (shareholders) and agents (employees).

Inertia

a firm's resistance to change the status quo, which can set the stage for the firm's subsequent failure

Core rigidity

a former core competency that turned into a liability because the firm failed to hone, refine, and upgrade the competency as the environment changed

Organizational Structure

a key to determining how the work efforts of individuals and teams are orchestrated and how resources are distributed

Ambidextrous organization

an organization able to balance and harness different activities in trade-off situations

Formalization

an organizational element that captures the extent to which employee behavior is steered by explicit and codified rules and procedures

Exploitation

applying current knowledge to enhance firm performance in the short term

Mechanistic Organization

characterized by a high degree of specialization and formalization and by a tall hierarchy that relies on centralized decision making

Ambidexterity

describes a firm's ability to address trade-offs not only at one point but also over time

Network Structure

firms connect centers of excellence.

Organic Organization

low degree of specialization and formalization, a flat organizational structure, and decentralized decision making

Input Controls

mechanisms in a strategic control-and-reward system that seek to define and direct employee behavior through a set of explicit, codified rules and standard operating procedures that are considered prior to the value-creating activities

Hierarchy

organizational element that determines the formal, position-based reporting lines and thus stipulates who reports to whom.

Simple Structure

organizational structure in which the founders tend to make all the important strategic decisions as well as run the day-to-day operations

Multidivisional Structure (M-Form)

organizational structure that consists of several distinct strategic business units, each with its own profit and loss responsibility

Functional Structure

organizational structure that groups employees into distinct functional areas based on domain expertise

Exploration

searching for new knowledge that may enhance a firm's future performance

Output Controls

seek to guide employee behavior by defining expected results (outputs), but leave the means to those results open to individual employees, groups, or SBUs

Specialization

the degree to which jobs are narrowly defined and depend on unique expertise

Organizational Design

the process of creating, selecting, or changing the structure of an organization