Management Chapter 8

Clan culture (definition)

Type of organizational culture that has an internal focus and values flexibility rather than stability and control

List the three levels of organizational culture in order of visibility

1) Observable artifacts 2) Espoused values 3) Basic assumptions

What are the two types of information that organizational charts reveal about organizational structure?

1) Vertical hierarchy of authority: who reports to whom 2) Horizontal specialization: who specializes in what work

Six conclusions about different culture types

1. An organization's culture matters: it can be a source of competitive advantage 2. Employees have more positive work attitudes when working in an organizations with clan cultures 3. Clan and market cultures are more likely to deliver higher customer satisfaction and market share 4. Operational outcomes, quality, and innovation are more strongly related to clan, adhocracy, and market cultures than to hierarchical ones 5. An organization's financial performance (profit and revenue) is related to market and hierarchy culture 6. Companies with market cultures tend to have more positive organizational outcomes

List the seven common element of an organization (4 by Edgar Schein, 3 additional)

1. Common purpose 2. Coordinated effort 3. Division of labor 4. Hierarchy of authority 5. Span of control (narrow vs. wide) 6. Authority, responsibility, and delegation 7. Centralized vs. decentralized authority

After determining an organization's vision and strategy, what is the top challenge for managers?

1. Create a culture that will motivate its members to work together 2. A structure that will coordinate their actions to achieve the organization's strategic goal

List the three factors to be considered in designing an organization's structure

1. Environment (mechanistic vs. organic) 2. Environment (differentiation vs. integration) 3. Link between strategy, culture, and structure

List the twelve ways a culture becomes established in an organization

1. Formal Statements 2. Slogans and Sayings 3. Rites and Rituals 4. Stories, Legends, and Myths 5. Leader Reactions to Crises 6. Role Modeling, Training, and Coaching 7. Physical Design 8. Rewards, Titles, Promotions, and Bonuses 9. Organizational Goals and Performance Criteria 10. Measurable and Controllable Activities 11. Organizational Structure 12. Organizational Systems and Procedures

What are the two dimensions that organizational effectiveness varies along?

1. Horizontal: inward versus outward focus 2. Vertical: Flexibility versus stability

Describe the two types of spans of control

1. Narrow: A manager has a limited number of people reporting. An organization is said to be tall when there are many levels with narrow spans of control 2. Wide: A manager has several people reporting. An organization is said to be flat when there are only a few levels with wide spans of control.

List the means by which employees learn culture (5)

1. Symbols 2. Stories 3. Heroes 4. Rites and rituals 5. Organizational socialization

How can you determine how well you might fit in before you go into a job interview?

1. Write down your strengths, weakness, and values 2. Do the same for the organization you're interviewing with 3. Prepare questions to ask the interviewer about how well you might fit

Modular Structure (Definition)

A boundary-less organizational structure that in which a firm assembles product chunks, or modules, provided by outside contractors.

Designs that Open Boundaries between Organizations/Boundary-less organization (Definition, description, + types)

A fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks. The collaborators may include not only co-workers but also suppliers, customers, and even competitors, and this form of business is ever-changing with informal business relationships. Includes... 1) Hollow Structure: Operating with a Central Core and Outsourcing Functions to Outside Vendors 2) Modular Structure: Outsourcing Pieces of a Product to Outside Firms 3) The Virtual Structure: An Internet-Connected Partner for a Temporary Project

Organizational structure (definition)

A formal system of task and reporting relationships that coordinates and motivates an organization's members so that they can work together to achieve the organization's goals. It is concerned with who reports to whom and who specializes in what work.

Stories (definition)

A narrative based on true events, which is repeated - sometimes embellished upon - to emphasize a particular value

Heroes (definition + description)

A person whose accomplishments embody the values of an organization; for example, the founder of Ikea's story.

Organization (definition)

A system of consciously coordinated activities or forces of two or more people

Divisional Structure (Definition)

A traditional organizational structure in which people with diverse occupational specialties are put together in formal groups by similar products or services, customer or clients, or geographic regions

Matrix Structure (definition)

A traditional organizational structure that combines functional and divisional chains of command in a grid so that there are vertical and horizontal.

Simple Structure (defintion + description)

A traditional organizational structure that has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization. This form is often found in a firm's very early entrepreneurial stages, when the organization is apt to reflect the desires and personality of the owner/founder

Functional Structure (Definition + description)

A traditional organizational structure where people with similar occupational specialties are put together in formal groups For example, putting people in marketing and production departments.. It is quite commonplace structure, seen in all kinds of organizations.

Slogans and Sayings (embedding culture)

A way to imbed culture; language, slogans, sayings, and acronyms

Rites and Rituals (definition + description)

Activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization's life, such as handing out incentives and awards

Horizontal Design (definition + description)

Also called a team-based design; teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries. For example, managers from different divisions work in a cross-functional team to solve problems and break barriers. However, team members still have full-time functional responsibilities and report to own managers.

Organizational Culture (definition)

Also called corporate culture; the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments.

Hollow structure (Definition + description)

Also called network structure; a boundary-less organizational structure that has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster. For example, a company might retain core processes such as design or marketing and outsource processes such as HR and distribution.

Hierarchy of Authority (definition + description)

Also known as chain of command; a control mechanism for making sure the right people do the right things at the right time. Needed to achieve coordinated effort.

Span of control (definition + description)

Also known as span of management; refers to the number of people reporting directly to a given manager. Two kinds: narrow (or tall) and wide (or flat)

Division of labor (definition + description)

Also known as work specialization; the arrangement of having discrete parts of a task done by different people.

Symbols (defintion + description)

An object or action that represents an idea or quality. With respect to culture, symbols are used to convey an organization's most important values (i.e. nike swish)

Organic Organization (Definition + description)

An organization in which authority is decentralized, there are fewer rules and procedures, and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks; loose structure. IT companies favor this arrangement, and organizations needed to respond to fast-changing consumer tastes favors this arrangement.

Measurable and Controllable Activities (embedding culture)

An organization's leaders can pay attention to, measure, and control a number of activities, processes, or outcomes that can foster a certain culture

Market culture (definition)

An organizational culture that has a strong external focus and values stability and control

Adhocracy culture (definition)

An organizational culture that has an external focus and values flexibility

Hierarchy Culture (defintion)

An organizational structure that has an internal focus and values stability and control over flexibility

Physical Design (embedding culture)

Can be used to encourage employee productivity and send a strong message about culture

List the four types of Organizational culture

Clan, Adhocracy, Hierarchy, and Market

Organizational design (definition + categories)

Concerned with designing the optimal structures of accountability and responsibility that an organization uses to execute its strategies. Includes 1) traditional design, 2) horizontal design, and 3) designs that open boundaries between organizations

What common organizational principle is represented by the statement: "Although it's true that individuals can make a difference, they cannot do everything by themselves"?

Coordinated Effort

Adhocracy culture (description)

Creation of new products and services is the strategic thrust of this culture, which attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace. Employees are encouraged to take risks and experiment with new ways of getting things done. Adhocracy cultures are well suited for start-up companies, those in industries undergoing constant change, and those in mature industries that are in need of innovation to enhance growth

Market culture (description)

Driven by competition and a strong desire to deliver results, in market culture customers, productivity, and profits take precedence over employee development and satisfaction. Employees are expected to work hard, react fast, and deliver quality work on time; those who deliver results are rewarded

Contingency approach (definition)

Emphasizes that a manager's approach should vary according to the individual and environmental situation

True or false: a company's success is enough to ensure culture

False: It is not enough, but the reverse is true. A positive corporate culture that engages and motivates employees will help a company's bottom line

Organizational Goals and Performance Criteria (embedding culture)

Goals and criteria for recruiting, selecting, developing, promoting, dismissing, and retiring people, all of which reinforce the desired organizational culture

What does division of labor lead to?

Greater efficiency, as complex work is divided by and performed by specialists

What structure is most likely to reinforce a culture oriented toward control and authority?

Hierarchical

What type of culture should companies avoid when pursuing operational outcomes, quality, and innovation?

Hierarchical, too many rules and procedures

What common organizational principle is represented by the statement: "People need to have more authority, or the right to direct work of others, for coordinated effort to be achieved"

Hierarchy of authority

Why is a good fit important?

It is associated with more positive work attitudes and task performance, lower stress, and fewer expressions of intent to quit. More than 50 percent of evaluators consider it the most important criteria

Line managers versus staff personnel

Line managers: Have the authority to make decisions and usually have people reporting to them, such as the president, Vice President, etc. Indicated by a solid line. Staff personnel: Have authority functions; they provide advice, recommendations, and research to line managers, and include specialists such as legal counsels and special managers. Indicated by a dotted line.

Role Modeling, Training, and Coaching (embedding culture)

Many companies provide structured training to provide an in-depth introduction to their organizational values; others build learning into their culture

What culture types are related to increased financial performance (profit and revenue growth)?

Market and hierarchy culture

What culture tends to have the most positive organizational outcomes?

Market culture

What does today's emphasis on lean management staffs and efficiency mean?

Means spans of control need to be as wide as possible while still providing adequate supervision; allows workers greater autonomy in decision making

How many subordinates are considered optimal?

No general consensus; however, when management duties are complex and managers need to be closely involved with subordinates, narrow spans of control are better

Basic assumptions (definition)

Non-observable core-values of an organization's culture - those that are taken for granted and, as a result, are difficult to change

Mechanistic organization (Definition + description)

Organization in which authority is centralized, tasks and rules are clearly specific, and employees are closely supervised with specialized tasks and few teams. They are bureaucratic, with rigid rules and top-down communication. They work best when an organization is operating in a stable-environment, and are often used with new companies with a difficult start-up period.

Describe organizational culture's purpose, contents, and how it is passed on

Organizational culture is the "social glue" that binds members of an organization together. It helps employees understand why the organization does what it does and how it intends to accomplish its long-term goals. It consists of the beliefs and values shared among a group of people in the workplace. It is passed on to new employees by ay of socialization and mentoring, which significantly affect work outcomes at all levels

Observable artifacts (definition)

Physical manifestations such as manny of dress, awards, myths and stories about the company, rituals and ceremonies, and decorations, as well as visible behavior exhibited by managers and employees.

What is the purpose of the competing values framework (CFV)

Provides a practical way for managers to understand, measure, and change organizational culture

Enacted values (definition)

Represent the values and norms actually exhibited in the organization, as opposed to espoused values

What are the strongest ways to embed organizational culture?

Rewards and status symbols

Clan culture (description)

Similar to a family-type organization, clan culture encourages collaboration among employees, striving to encourage cohesion through consensus and job satisfaction and to increase commitment through employee involvement. They devote significant resources to hiring and developing their employees, and they view customers as partners.

Formal Statements (embedding culture)

Statements such as organizational philosophy, mission, vision, and values, as well as materials used for recruiting, selecting, and socializing employees

What causes differentiation?

Technical specialization and division of labor; specialists behave in specific, delimited, ways without coordinating with other parts of the organization.

Traditional designs (description and 4 types)

Tend to favor structures that rely on a vertical management hierarchy, with clear departmental boundaries and reporting arrangements. Includes... 1) Simple Structure: For the small firm 2) Functional Structure: Grouping by Similar Work Specialties 3) Division Structure: Grouping by Similarity of Purpose 4) Matrix Structure: A did of Functional and Divisional for Two Chains of Command

Coordinated effort (definition/description)

The coordination of individual efforts into a group or organization wide effort. It is through this that common purpose is realized.

Espoused values (definition)

The explicitly stated values and norms preferred by an organization, as may be put forth by the firm's founder or top managers

Person-organization (PO) fit (definition)

The extent to which your personality and value match the climate and culture of an organization

Responsibility (definition + description)

The obligation you have to perform the tasks assigned to you. It is the sign of a faulty job design when managers are given too much authority and not enough responsibility

Organizational Socialization (definition)

The process by which people learn the values, norms, and required behaviors that permit them to participate as members of an organization

Delegation (defintion + description)

The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy. To be more efficient, managers should delegate as much work as possible (70% rule)

Integration (Definition)

The tendency of parts of an organization to draw together to achieve a common purpose

Differentiation (Definition + description)

The tendency of the parts of an organization to disperse and fragment. The more subunits into which an organization breaks down, the more highly differentiated it is.

Hierarchy Culture (description)

Those with this culture have a formalized, structured work environment aimed at achieving effectiveness through a variety of control mechanisms that measure efficiency, timeliness, and reliability in the creation and delivery of products

What is a primary challenge for top managers (chapter 8)?

To align the organization's vision and strategies with its organizational culture and organizational structure

True or false: Two people coordinating to work a lemonade stand qualifies as an organization according to Chester Barnard's definition

True

True or false: employees prefer to work in organizations that value flexibility over stability and control

True

Common purpose (definition/description)

Unifies employees or members and gives everyone an understanding of the organization's reason for being. Without it, an organization soon begins to drift and become disorganized

Mutual-benefit organizations (definition)

Voluntary collectives whose purpose is to advance members' interests, such as unions and trade associations

Authority, Responsibility, and Delegation: Line versus Staff Positions (description)

With authority goes accountability, increased responsibility, and the ability to delegate one's authority. In regard to authority and responsibility, the organizational chart distinguishes between line and staff positions.

Organizational chart (definition)

a box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specializations