Management Chapter 8

4 Common Elements of Organizations

1) Common Purpose 2) Coordinated Effort 3) Division of Labor 4) Hierarchy of Authority

3 Factors to Be Considered in Designing and Organization's Structure

1) Environment - mechanistic versus organic (the Burns and Stalker Model) 2) Environment - differentiation versus integration (the Lawrence and Lorsch Model) 3) Link between strategy, culture, and structure

3 Types of Organizations

1) For-Profit Organizations 2) Non-Profit Organizations 3) Mutual-Benefit Organizations

12 Ways to Change Organizational Culture

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

3 Levels of Organizational Culture

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

How an organization's culture and structure are used to implement strategy

1) Organizational culture 2) Organizational structure

4 Types of Organizational Culture

1) Clan 2) Adhocracy 3) Hierarchy 4) Market

Hierarchy of Authority

Also known as chain of command; a control mechanism for making sure the right people do the right things at the right times.

Division of Labor

Also known as work specialization; arrangement of having discrete parts of a task done by different people. The work is divided into particular tasks assigned to particular workers.

Symbols

An object, act, quality, or event that conveys meaning to others.

Virtual Organization

An organization whose members are geographically apart, usually working with e-mail collaborative computing, and other computer connections. It allows for virtual structure.

Horizontal Design/Team-based Design

Arrangement in which teams or workgroups, wither temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries.

Line Manager

Managers who have the authority to make decisions and usually have people reporting to them.

How employees can learn culture

1) Symbols 2) Stories 3) Heroes 4) Rites and rituals

2 Types of Information an Organization Chart Reveals

1) Vertical Hierarchy of Authority - Who reports to whom 2) Horizontal Specialization - Who specializes in what work

Virtual Structure

A company outside a company that is created "specifically to respond to an exceptional market opportunity that is often temporary.

Boundaryless Organization

A fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks; the collaborators may include competitors, suppliers, and customers.

Organizational structure

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.

Common Purpose

A goal that unifies employees or members and gives everyone an understanding of the organization's reason for being.

Organization

A group of people who work together to achieve some specific purpose. A system of consciously coordinated activities or forces of two or more people.

Narrow Span of Control

A manager has limited number of people reporting.

Wide Span of Control

A manager has several people reporting.

Stories

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

Heroes

A person whose accomplishments embody the values of the organization.

Organization Chart

Box-and-lines illustration of the formal relationships of positions of authority and the organization's official positions or work specializations.

Organizational Design

Creating the optimal structures of accountability and responsibility that an organization used to execute its strategies.

Accountability

Describes expectation that managers must report and justify work results to the managers above them.

Customer Divisions

Divisional structures in which activities are grouped around common customers or clients.

Geographic Divisions

Divisional structures in which activities are grouped around defined regional locations.

Product Divisions

Divisional structures in which activities are grouped around similar products or services.

Espoused values

Explicitly stated values and norms preferred by an organization.

Matrix Structure

Fourth type of organizational structure, which combines functional and divisional chains of command in a grid so that there are two command structures--vertical and horizontal

Basic assumptions

Not observable, represent the core values of an organization's culture--those that are taken for granted and, as a result, are difficult to change.

Mechanistic Organization

Organization in which authority is centralized, tasks and rules are clearly specified, and employees are closely supervised.

Organic Organization

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.

Decentralized Authority

Organizational structure in which important decisions are made by middle-level and supervisory-level managers--power is delegated throughout the organization.

Centralized Authority

Organizational structure in which important decisions are made by upper managers--power is concentrated on top.

Flat Organizaton

Organizational structure with few or no levels of management between top managers and those reporting to them.

Observable artifacts

Physical manifestations of culture. Ex. manner of dress, awards, myths and stories about the company, rituals and ceremonies, decorations, and visible behaviors

Unity of Command

Principle that stresses an employee should report to no more than one manager on order to avoid conflicting priorities and demands.

Modular Structure

Seventh type of organizational structure, in which a firm assembles product chunks, or modules, provided by outside contractors.

Staff Personnel

Staff with advisory functions; they provide advice, recommendations, and research to line managers.

Hollow Structure/Network Structure

Structure in which the organization has a central core key functions and outsources other functions to vendors who can do them cheaper or faster.

Organizational Culture/Corporate Culture

System of shared beliefs and values that develops within an organization and guides the behavior of its members.

Rites and rituals

The activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishment in an organization's life.

Coordinated Effort

The coordination of individual efforts into a group or organization-wide effort.

Person-organization fit

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

Simple Structure (for a small firm)

The first type of organizational structure, whereby an organization has authority centralized in a single person, as well as a flat hierarchy, few rules, and low work specialization.

Span of control

The number of people reporting directly to a given manager.

Responsibilty

The obligation one has to perform assigned tasks.

Delegation

The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy.

Contingency design

The process of fitting the organization to its environment.

Authority

The right to perform or command; also, the rights inherent in a managerial position to make decisions give orders, and utilize resources.

Functional Structure (grouping by similar work specialties)

The second type of organizational structure, whereby people with similar occupational specialties are put together in formal groups.

Differentiation

The tendency of the parts of an organization to disperse and fragment.

Integration

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

Divisional Structure (grouping by similarity of purpose)

The third type of organizational structure, whereby people with diverse occupational specialties are put together in formal groups according to products and/or services, customers and/or clients, or geographic regions.

For-Profit Organizations

These are formed to make money, or profits, by offering products or services

Non-Profit Organizations

These are formed to offer services to some clients, not to make a profit

Mutual-Benefit Organizations

These are voluntary collectives whose purpose is to advance members' interests

Hierarchy Culture

Type of organizational culture that has a strong external focus and values stability and control. Control

Adhocracy Culture

Type of organizational culture that has an external focus and values flexibility. Create

Market Culture

Type of organizational culture that has an internal focus and values stability and control over flexibility. Compete

Clan Culture

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

Enacted values

Values and norms actually exhibited in an organization