MGMT 454 test 1

organizations

(1) social entities that (2) are goal-directed, (3) are designed as deliberately structured and coordinated activity systems, and (4) are linked to the external environment.

competitive itelligence

(CI) gives top executives a systematic way to collect and analyze public information about rivals and use it to make better decision. Using techniques that range from Internet surfing to digging through trash cans, intelligence professionals dig up information on competitors' new products, manufacturing costs, or training methods and share it with top leaders.

niche

(i.e., a domain of unique environmental resources and needs) sufficient to support it. The niche is usually small in the early stages of an organization but may increase in size over time if the organization is successful. If the organization doesn't find an appropriate niche, it will decline and may perish.

headquarters planning

A second approach to achieving stronger global coordination is for headquarters to take an active role in planning, scheduling, and control to keep the widely distributed pieces of the global organization working together and moving in the same direction.

full time integrator

A stronger horizontal linkage device is to create a full-time position or department solely for the purpose of coordination. A full-time integrator frequently has a title, such as product manager, project manager, program manager, or brand manager. Unlike the liaison person described earlier, the integrator does not report to one of the functional departments being coordinated

task forces

A task force is a temporary committee composed of representatives from each organizational unit affected by a problem.29 Each member represents the interest of a department or division and can carry information from the meeting back to that department. temporary uses.

standardization versus local responsiveness

Managers must decide whether they want each global affiliate to act autonomously or whether activities should be standardized across countries. These decisions are reflected in the choice between a globalization versus a multidomestic global strategy.

complexity and differentiation

Companies have to create a structure to operate in numerous countries that differ in economic development, language, political systems and government regulations, cultural norms and values, and infrastructure such as transportation and communication facilities.

smart factory typically includes several subcomponents:

Computer-aided design computer aided manufacturing robots 3D printing (additive manufacturing)

general economic conditions

General economic conditions often affect the way a company must do business. The global recession that began in 2008 affected companies in all industries. Briggs Inc., a small New York City company that plans customized events for corporations wanting to woo top clients or reward staff or client loyalty, had to make some changes when it began losing customers. Even huge, elite corporations were hesitant to spend extravagantly in the weakening economy, so Briggs began looking for ways to save clients' money, such as moving events to smaller venues, scaling down décor, and adding extras that didn't add to the cost. Companies can hold stylish and unique events in boutique hotels instead of Fifth Avenue locations, for instance. The strategy was a financial burden for Briggs, but it helped the company hold onto clients for the long term.

Hawthorne studies

Interpretations of these studies at the time concluded that positive treatment of employees improved their motivation and productivity. The publication of these findings led to a revolu- tion in worker treatment and laid the groundwork for subsequent work examin- ing treatment of workers, leadership, motivation, and human resource management. These human relations and behavioral approaches added new and important con- tributions to the study of management and organizations.

factors of production

One of the earliest, and still one of the most power- ful, motivations for U.S. companies to invest abroad is the opportunity to obtain raw materials, labor, and other resources at the lowest possible cost. Organizations have long turned overseas to secure raw materials that were scarce or unavailable in their home country.

teams

Project teams tend to be the strongest horizontal linkage mechanism. Teams are permanent task forces and are often used in conjunction with a full- time integrator. When activities among departments require strong coordination and collaboration over a long period of time, a cross-functional team is often the solution

economies of scope

Scope refers to the number and variety of products and services a company offers as well as the number and variety of regions, countries, and markets it serves.

matrix structure

Sometimes, an organization's structure needs to be multi-focused in that both product and function or product and geography are emphasized at the same time. One way to achieve this is through the matrix structure.63 The matrix can be used when both technical expertise and product innovation and change are important for meet- ing organizational goals. The matrix structure often is the answer when organizations find that the functional, divisional, and geographic structures combined with horizontal linkage mechanisms will not work.

sectors

The environment comprises several sectors or subdivisions that contain similar elements. Eleven sectors can be analyzed for each organization: industry, raw materials, human resources, financial resources, market, technology, economic conditions, government, natural, sociocultural, and international.

CH: 6 economies of scale

The trend toward large organizations was initially sparked by the Industrial Revolution, which created pressure in many industries for larger factories that could seize the benefits of economies of scale offered by new technologies and production methods. Through large-volume production, these industrial giants were able to achieve the lowest possible cost per unit of production.

smart factories

The ultimate automated factories are referred to as smart factories.29 Also called digital factories, computer-integrated manufacturing, flexible manufacturing systems, advanced manufacturing technology, or agile manufacturing, smart factories link manufacturing components that previously stood alone. Thus, robots, machines, product design, and engineering analysis are coordinated by a single computer system in an interconnected web of information and production.

institutional perspective

describes how organizations survive and succeed through congruence between an organization and the expectations from its environment. the institutional view believes that organi- zations adopt structures and processes to please outsiders, and these activities come to take on rule-like status in organizations.

structural dimensions: hierarchy of authority

describes who reports to whom and the span of control for each manager. The hierarchy is depicted by the vertical lines on an organization chart, as illustrated in Exhibit 1.4. The hierarchy is related to span of control (the number of employees reporting to a supervisor). When spans of control are narrow, the hierarchy tends to be tall. When spans of control are wide, the hierarchy of authority will be shorter.

operating goals

designate the ends sought through the actual operating procedures of the organization and explain what the organization is actually trying to do. Operating goals describe specific measurable outcomes and are often concerned with the short run. Operating goals typically pertain to the primary tasks an organization must perform..

The success of the international business development group prompted Colgate's top management to add two additional coordinating positions

a vice president of corporate development to focus on acquisitions and a worldwide sales and marketing group that coordinates sales and marketing initiatives across all geographic locations. With these worldwide positions added to the structure, Colgate maintains its focus on each region and achieves global coordination for overall planning, faster product introductions, and enhanced sales and marketing efficiency.

service firms

accomplish their primary purpose through the production and provision of services, such as education, healthcare, transportation, banking, and hospitality. Studies of service organizations have focused on the unique dimensions of service technologies

types of resource-dependency relationships

acquisition/merger, joint venture, strategic alliance, supply sourcing, trade association, board interlock

direct interlock

When one individual is the link between two companies

analyzability

When the conversion process is analyzable, the work can be reduced to mechanical steps and participants can follow an objective, computational procedure to solve problems.

mechanistic organization system

When the external environment was stable, the internal organization was characterized by standard rules, procedures, a clear hierarchy of authority, formalization, and centralization

strategy

a plan for interacting with the competitive environment to achieve organizational goals.

departmental groupings

affects employees because they share a common supervisor and common resources, are jointly responsible for performance, and tend to identify and collaborate with one another.

functional structure

also called a U-form (unitary), activities are grouped together by common function from the bottom to the top of the organization.42 All engineers are located in the engineering department, and the vice president of engineering is responsible for all engineering activities.

divisional structure

also called an M-form (multidivisional) or a decentralized form, separate divisions can be organized with responsibility for individual products, services, product groups, major projects or programs, divisions, businesses, or profit centers.

global teams

also called transnational teams, are cross-border work groups made up of multiskilled, multinational members whose activities span multiple countries.85 Typically, teams are of two types: intercultural teams, whose members come from different countries and meet face to face, and virtual global teams, whose members remain in separate locations around the world and conduct their work electronically

hybrid organization

an organization that mixes value systems and behaviors that represent two different sectors of society, which leads to tensions and conflict within the organization over goals and priorities.29 The goals and values of the two sides are sometimes mutually exclusive, so managers have to negotiate and come to some agreement on which direction the company will take.

non profit organizations

anagers in nonprofits direct much of their effort toward generating some kind of social impact. Managers have to measure intangible goals such as "improve public health," "make a difference in the lives of the disenfranchised," or "enhance appreciation of the arts.

craft technology

are characterized by a fairly stable stream of activities, but the conversion process is not analyzable or well understood. Tasks require extensive training and experience because employees respond to intangible factors on the basis of wisdom, intuition, and experience.

routine techonology

are characterized by little task variety and the use of objective, computational procedures. The tasks are formalized and standardized. Examples include an automobile assembly line and a bank teller department.

contingency and structural dimensions

are interdependent. Certain contingency factors will influence the appropriate degree of specialization, formalization, and so forth for the organization. For example, large organization size, a routine technology, and a stable environment all tend to create an organization that has greater formalization, specialization, and centralization. More detailed relationships among contingency factors and structural dimensions are explored throughout this book.

challenges of global design

complexity and differentiation, need for coordination, transfer of knowledge and innovation

what are some contingency factors:

culture, environment, size, technology, goals and strategy

what makes up an organic design

decentralized, empowered roles, few rules, informal, horizontal communication, collaborative teamwork. typical contingency factors: small size, innovative strategy, changing environment, adaptive culture, service technology. pg 30

contingency factors: the organizations goals and strategy

define the purpose and competitive tech- niques that set it apart from other organizations. Goals are often written down as an enduring statement of company intent. A strategy is the plan of action that describes resource allocation and activities for dealing with the environment and for reaching the organization's goals. Goals and strategies define the scope of operations and the relationship with employees, customers, and competitors. (Daft 21)

what are inputs?

raw materials, people, information, financial resources

dynamism

refers to whether the environment in which the organization operates is stable or unstable. An environmental domain is stable if it remains essentially the same over a period of months or years. Under unstable conditions, environmental elements shift rapidly.

small batch production

relies heavily on the human operator; it is thus not highly mechanized.

rational goal emphasis

represents management values of structural control and external focus. The primary goals are productivity, efficiency, and profit. The organization wants to achieve output goals in a controlled way. Subgoals that facilitate these outcomes are internal planning and goal setting, which are rational management tools. The rational goal emphasis is similar to the goal approach described earlier.

technical complexity

represents the extent of mechanization of the manufacturing process. High technical complexity means most of the work is performed by machines. Low technical complexity means workers play a larger role in the production process.

coercive

stem from political influence. are the external pressures exerted on an organization to adopt structures, techniques, or behaviors similar to other organizations.

multinational stage

the company has extensive experience in a number of international markets and has established marketing, manufacturing, or research and development (R&D) facilities in several foreign countries. The organization obtains a large percentage of revenues from sales outside the home country. Explosive growth occurs as international operations take off, and the company has business units scattered around the world along with suppliers, manufacturers, and distributors.

domestic

the company is domestically oriented but managers are aware of the global environment and may want to consider initial foreign involvement to expand production volume and realize economies of scale. Market potential is limited and is primarily in the home country. The structure of the company is domestic, typically functional or divisional, and initial foreign sales is handled through an export department. The details of freight forwarding, customs problems, and foreign exchange are handled by outsiders.

international stage

the company takes exports seriously and begins to think multidomestically. Multidomestic means competitive issues in each country are independent of other countries; the company deals with each country individually. The concern is with international competitive positioning compared with other firms in the industry. At this point, an international division has replaced the export department, and specialists are hired to handle sales, service, and warehousing abroad. Multiple countries are identified as a potential market.

mechanistic design

the organization is characterized by machine-like standard rules, procedures, and a clear hierarchy of authority. Organizations are highly formalized and are also centralized, with most decisions made at the top.

buffering roles

to absorb uncertainty from the environment. The technical core performs the primary production activity of an organization. Buffer departments surround the technical core and exchange materials, resources, and money between the environment and the organization. They help the technical core function efficiently. The purchasing department buffers the technical core by stockpiling supplies and raw materials. The human resource department buffers the technical core by handling the uncertainty associated with finding, hiring, and training production employees.

population-ecology perspective

differs from the other perspectives because it focuses on organizational diversity and adaptation within a population of organizations

low cost leadership strategy

tries to increase market share by keeping costs low compared to competitors. WAlmart With a low-cost leadership strategy, the organization aggressively seeks efficient facilities, pursues cost reduc- tions, and uses tight controls to produce products or services more efficiently than its competitors. Low cost doesn't necessarily mean low price, but in many cases cost leaders provide goods and services to customers at cheaper prices.

global geographic structure

divides the world into geographic regions, with each geographic division reporting to the CEO. Each division has full control of functional activities within its geographic area.

stages of international development

domestic, international, multinational, global

collaborative roles

don't have direct authority over horizontal col- leagues or partners, but are nonetheless accountable for specific business results. Managers in collaborative roles have to be highly flexible and proactive. They achieve results through personal communication and assertively seeking out needed information and resources.

global matrix structure

e matrix works best when pressure for decision making balances the interests of both product standardization and geographic localization and when coordina- tion to share resources is important. The matrix can support a mixed globaliza- tion and multidomestic strategy, as illustrated in Exhibit 6.6; that is, it can enable a global firm to achieve aspects of both global uniformity and local diversification and responsiveness.

coordination

efers to the quality of collabo- ration across organizational units. The question is how to achieve the integration and collaboration that is necessary for a global organization to reap the benefits of economies of scale, economies of scope, and labor and production cost efficiencies that international expansion offers.

Pioneered by Frederick Winslow Taylor, scientific management

emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity. Taylor proposed that workers "could be retooled like machines, their physical and mental gears recalibrated for better productivity." He insisted that management itself would have to change and emphasized that decisions based on rules of thumb and tradition should be replaced with precise procedures developed after careful study of individual situations. To use this approach, managers develop precise, standard procedures for doing each job, select workers with appropriate abilities, train workers in the standard procedures, carefully plan work, and provide wage incentives to increase output.

contingency factors

encompass larger elements that influence structural dimensions, including the organization's size, technology, environment, culture, and goals. Contingency factors describe the organizational setting that influences and shapes the structural dimensions. Contingency factors can be confusing because they represent both the organization and the environment.

chapter 4: organizational environment

everything that exists outside the boundary of the organization and has the potential to affect all or part of the organization. The environment of an organization can be understood by analyzing its domain within external sectors.

open systems emphasis

external focus and flexible structure. Management's primary goals are growth and resource acquisition. The organization accomplishes these goals through the subgoals of flexibility, readiness, and a positive external evaluation. The dominant value is establishing a good relationship with the environment to acquire resources and grow. This emphasis is similar in some ways to the resource-based approach described earlier.

internal process approach

ffectiveness is measured as internal organizational health and efficiency. An effective organization has a smooth, well-oiled internal process. Employees are happy and satisfied. Department activities mesh with one another to ensure high productivity. This approach does not consider the external environment. The important element in effectiveness is what the organization does with the resources it has, as reflected in internal health and efficiency.

what are some structural dimensions

formalization, specialization, a hierarchy of authority, complexity, centralization

global coordination mechanisms

global teams, headquarters planning, expanding coordination roles

four effectiveness approaches

goal approach, resource-based approach, internal process approach, strategic constituents approach.

contingency factors: environment

includes all elements outside the boundary of the organization. Key elements include the industry, government, customers, suppliers, and the financial community. The environmental elements that affect an organization the most are often other organizations.

strategic intent

includes defining an overall mission and official goals based on the correct fit be- tween external opportunities and internal strengths. Leaders then formulate specific operational goals and strategies that define how the organization is to accomplish its overall mission. ll the organization's energies and resources are directed toward a focused, unifying, and compelling overall goal Three aspects related to strategic intent are the mission, core competence, and com- petitive advantage.

task environment

includes sectors with which the organization interacts directly and that have a direct impact on the organization's ability to achieve its goals. The task environment typically includes the industry, raw materials, and market sectors, and perhaps the human resources and international sectors

general environment

includes those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it. The general environment often includes the government, natural, sociocultural, economic conditions, technology, and financial resources sectors. These sectors affect all organizations eventually.

level of analysis

individual: the basic building block of orgs group: collections of people working together to perform group tasks. organization: collection of groups that combine the total organization. external environment:

internal process emphasis

internal focus and controlled structure. The primary outcome is a stable organizational setting that maintains itself in an orderly way. Organizations that are well established in the environment and simply want to maintain their cur- rent position would reflect this emphasis.

human relations emphasis

internal focus and flexible structure. management concern is for the development of human resources. Employees are given opportunities for autonomy and development. Management works toward the subgoals of cohesion, morale, and training opportunities. Organizations adopting this emphasis are more concerned with

license agreements

involve the purchase of the right to use an asset (such as new technology) for a specific time and supplier arrangements that contract for sale of one firm's output to another.

effectivness

is a broader term, meaning the degree to which an organization achieves its goals. To be effective, organizations need clear, focused goals and appropriate strategies for achieving them.

intelligence teams

is a cross-functional group of managers and employees, usually led by a CI professional, who work together to gain a deep understanding of a specific business issue, with the aim of presenting insights, possibilities, and recommendations to top leaders. they can provide insights that enable managers to make more informed decisions about goals and devise contingency plans and scenarios related to major compeitive issues.

noncore technology

is a department work process that is important to the organization but is not directly related to its primary mission.

chapter 2: organizational goal

is a desired state of affairs that the organization attempts to reach. a goal represents a result or end point toward which organizational efforts are directed.

trade association

is a federation that allows organizations, often in the same industry, to meet, share information, and monitor one another's activities. A trade association can also use collective resources to lobby for government policies to protect the industry.

interlocking directorate

is a formal linkage that occurs when a member of the board of directors of one company sits on the board of directors of another company. The individual is a communications link between companies and can influence policies and decisions.

six sigma

is a highly ambitious quality standard that specifies a goal of no more than 3.4 defects per million parts.39 However, Six Sigma has deviated from its precise definition to become a generic term for a quality-control approach that emphasizes a disciplined and relentless pursuit of higher quality and lower costs

organization theory and design

is a macro examination of organizations because it analyzes the whole organization as a unit. Organization design is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis. Organization design might be considered the sociology of organizations, while organizational behavior is the psychology of organizations.

large batch production

is a manufacturing process characterized by long production runs of standardized parts. Output often goes into inventory from which orders are filled because custom- ers do not have special needs. Examples include traditional assembly lines, such as for automobiles.

joint venture

is a new distinct organizational entity set up by two or more organizations to jointly develop an innovative product or shared technology.

joint venture

is a separate entity created with two or more active firms as sponsors. This is a popular approach to sharing development and production costs and penetrating new markets.37 Joint ventures may be with either customers or competitors.

population

is a set of organizations engaged in similar activities with similar patterns of resource utilization and outcomes. Organizations within a population compete for similar resources or similar customers, such as financial institutions in the Seattle area or car dealerships in Houston, Texas.

organizational ecosystem

is a system formed by the interaction of a community of organizations and their environment. An ecosystem cuts across traditional industry lines. A similar concept is the mega community approach, in which businesses, governments, and nonprofit organizations join together across sectors and industries to tackle huge, compelling problems of mutual interest, such as energy development, world hunger, or cyber crime.

the defender strategy

is almost the opposite of the prospector. Rather than taking risks and seeking out new opportunities, the defender strategy is concerned with stability or even retrenchment. This strategy seeks to hold on to current customers, but it neither innovates nor seeks to grow. The defender is concerned primarily with internal efficiency and control to produce reliable, high- quality products for steady customers. This strategy can be successful when the organization exists in a declining industry or a stable environment.

domain

is the chosen environmental field of action. it is the territory an organization stakes out for itself with respect to products, services, and markets served. The domain defines the organization's niche and defines those external sectors with which the organization will interact to accomplish its goals.

structural dimensions: specialization

is the degree to which organizational tasks are subdivided into separate jobs. If specialization is extensive, each employee performs only a narrow range of tasks. If specialization is low, employees perform a wide range of tasks in their jobs. Specialization is sometimes referred to as the division of labor.

Institutional similarity, called institutional isomorphism

is the emergence of a common structure and approach among organizations in the same field. Isomorphism is the process that causes one unit in a population to resemble other units that face the same set of environmental conditions

the first vertical device

is the hierarchy, or chain of command. If a problem arises that employees don't know how to solve, it can be referred up to the next level in the hierarchy. When the problem is solved, the answer is passed back down to lower levels. The lines of the organization chart act as communication channels.

boundary-spanning roles

link and coordinate an organization with key elements in the external environment. boundary spanning is primarily concerned with the exchange of information to detect and bring into the organization information about changes in the environment and to send information into the environment that presents the organization in a favorable light.

administrative principles

looked at the design and functioning of the organization as a whole. For example, Henri Fayol proposed 14 principles of management, such as "each subordinate receives orders from only one superior" (unity of command) and "similar activities in an organization should be grouped together under one manager" (unity of direction). These principles formed the foundation for modern management practice and organization design.

resource based approach

looks at the input side of the transformation process. organizational effectiveness is defined as the ability of the organization, in either absolute or relative terms, to obtain scarce and valued resources and successfully integrate and manage them.

frame work: complex + stable

low - moderate uncertainty universities, appliance, manufacturers, chemical companies

framework: simple + stable =

low uncertainity EX: soft drink bottlers, self storage leasing, container manufacturers, food processors few external elements that change slowly

an open system

obtains inputs from the external environment, adds value through a transformation process, and discharges products and services back to the environment.

indirect interlock

occurs when a director of company A and a director of company B are both directors of company C. They have access to one another but do not have direct influence over their respective companies.

cooptation

occurs when leaders from important sectors in the environment are made part of an organization. It takes place, for example, when influential customers or suppliers are appointed to the board of directors, such as when the senior executive of a bank sits on the board of a manufacturing company. As a board member, the banker may become psychologically coopted into the interests of the manufacturing firm.

goal approach

onsists of identifying an organization's output goals and assessing how well the organization has attained those goals.60 This is a logical approach because organizations do try to attain certain levels of output, profit, or client satisfaction. The goal approach measures progress toward the attainment of those goals.

struggle for existence

or competition. Organizations and populations of organizations are engaged in a competitive struggle over resources, and each organizational form is fighting to survive. The struggle is most intense among new organizations, and both the birth and survival frequencies of new organizations are related to factors in the larger environment.

analyzer

tries to maintain a stable business while innovating on the periphery. It seems to lie midway between the prospector and the defender. Some products will be targeted at stable environments in which an efficiency strategy designed to keep current customers is used. Others will be targeted at new, more dynamic environments, where growth is possible. The analyzer attempts to balance efficient production for current product or service lines with the creative development of new product lines.

lean manufacturing

uses highly trained employees at every stage of the production process, who take a painstaking approach to squeeze out all waste to improve value to the customer. Lean manufacturing is typically combined with Six Sigma.

when does an organization exist

when people interact with one another to perform essential functions that help attain goals. Managers and owners deliberately structure organizational resources to achieve the organization's purpose.

CH. 3 organizational structure

1. Organization structure designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors. 2. Organization structure identifies the grouping together of individuals into departments and of departments into the total organization. 3. Organization structure includes the design of systems to ensure effective communication, coordination, and integration of efforts across departments.

high-moderate uncertainty: unstable and simple

1. organic design, teamwork: participative, decentralized 2. few departments, much boundary spanning 3. few integrating roles 4. planning orientation; fast response

these dimensions boil down to two essential ways the environment influences organizations

1. the need for info about changes in the environment 2. the need for resources from the environment, he environmental conditions of complexity and dynamism create a greater need to gather information and to respond to changes based on that information. The organization also is concerned with scarce financial resources and with the need to ensure availability of resource

low - moderate uncertainty: stable and compex

1. mechanistic design: formal centralized 2. many departments, some boundary spanning 3. few integrating roles 4. some planning; moderate-speed response

low uncertainty: stable and simple

1. mechanistic design: formal, centralized 2. few departments 3. no integrating roles 4. current operations orientatin; low speed response

high uncertainty: unstable and complex

1. organic design, teamwork: participative and decentralized 2. many departments differentiated extensive boundary spanning 3. many integrating roles 4. extensive planning, forecSting; high speed response

official goals v operating goals

Both official goals and operating goals are important for the organization, but they serve very different purposes. Official goals and mission statements describe a value system for the organization and set an overall purpose and vision; operating goals represent the primary tasks of the organization. Official goals legitimize the organi- zation; operating goals are more explicit and well defined.

conditions for the matrix

Condition 1. Pressure exists to share scarce resources across product lines. The organization is typically medium-sized and has a moderate number of product lines. It feels pressure for the shared and flexible use of people and equipment across those products. For example, the organization is not large enough to as- sign engineers full-time to each product line, so engineers are assigned part-time to several products or projects. • Condition 2. Environmental pressure exists for two or more critical outputs, such as for in-depth technical knowledge (functional structure) and frequent new products (divisional structure). This dual pressure means a balance of power is needed between the functional and product sides of the organization, and a dual authority structure is needed to maintain that balance. • Condition 3. The environmental domain of the organization is both complex and uncertain. Frequent external changes and high interdependence between departments require a large amount of coordination and information processing in both vertical and horizontal directions. Under these three conditions, the vertical and horizontal lines of authority must be given equal recognition. A dual-authority structure is thereby created so the balance of power between them is equal.

benefits of coordination

Cost savings. Collaboration can produce real, measurable results in the way of cost savings from the sharing of best practices across global divisions. For example, at BP, a business unit head in the United States improved inventory turns and cut the working capital needed to run U.S. service stations by learning the best practices from BP operations in the United Kingdom and the Netherlands. • Better decision making. By sharing information and advice across divisions, managers can make better business decisions that support their own unit as well as the organization as a whole. Greater revenues. By sharing expertise and products among various divisions, organizations can reap increased revenues. BP again provides an example. More than 75 people from various units around the world flew to China to assist the team developing an acetic acid plant there. As a result, BP finished the project and began realizing revenues sooner than project planners had expected. • Increased innovation. The sharing of ideas and technological innovations across units stimulates creativity and the development of new products and services. McDonald's is taking an approach called "freedom within a framework" that allows regional and national managers to develop practices and products suited to the local area. The company then makes sure international managers have plenty of both formal and informal ways to communicate and share ideas. The Big Tasty, a whopping 5.5-oz. beef patty slathered in barbeque sauce and topped with three slices of cheese, was created in a test kitchen in Germany and launched in Sweden, but as word spread, the sandwich was adopted by restaurants in places like Brazil, Italy, and Portugal, where it became a huge hit.99

Woodward's scale of technical complexity originally had 10 categories, as summarized in Exhibit 7.3. These categories were further consolidated into three basic technology groups, as follows:

Group 1: small batch and unit production Group 2: large batch and mass production Group 3: continuous process production

frame work: complex+ unstable

High Uncertainty oil companies, aerospace firms, telecommunication firms, large healthcare systems many external elements that change rapidly

functional matrix

In a functional matrix, the functional bosses have primary authority and the project or product managers simply coordinate product activities.

product matrix

In a product matrix, by contrast, the project or product managers have primary authority and functional managers simply assign technical personnel to projects and provide advisory expertise as needed. For many organizations, one of these approaches works better than the balanced matrix with dual lines of authority

government sector

In the government sector, regulations influence every phase of organizational life. Two of the most prominent and far-reaching changes in the United States in recent years were the Patient Protection and Affordable Care Act (ObamaCare) and the Dodd-Frank Act (financial regulatory reform).7 Small companies in par- ticular are struggling with the time and expense required to meet provisions of new healthcare and financial reform laws.

market sector

In the market sector, smart companies are keeping tabs on social media (tweets, Facebook) to see what customers and potential customers care about, gain rapid insight into trends, and learn what words to use in marketing. For example, companies such as Mars, the maker of M&Ms, and Kraft, which makes different varieties of macaroni and cheese, are tweaking their products, particularly the use of certain food dyes, to address customer concerns.

sociocultural sector

One significant element in the sociocultural sector is pressure from advocacy groups to improve working conditions for employees hired by contractors for large companies such as Walmart, Apple, and Amazon. Walmart recently suspended one of its seafood suppliers in the South after immigrant workers said they had been forced to work more than 80 hours a week, threatened with beatings, and told their families in Mexico would be hurt if they complained to government agencies. The National Guestworker Alliance released a list of 644 federal citations at 12 Walmart food suppliers. "We work with more than 60,000 suppliers in the United States and we have rigorous standards in place that our suppliers are required to follow," said Lorenzo Lopez, a Walmart spokesman, adding that Walmart is conducting its own investigation and will terminate its relationship with any suppliers that violate its ethical standards.

liaison roles

One way to promote direct contact is to create a special liaison role. A liaison person is located in one department but has the responsibility for communicating and achieving coordination and collaboration with another department. Liaison roles often exist between engineering and manufacturing departments because engineering has to develop and test products to fit the limitations of manufacturing facilities.

social construct

Organizational effectiveness is a social construct, meaning that it is created and defined by an individual or group rather than existing independently in the external world.

generalist v specialist

Organizations with a wide niche or domain—that is, those that offer a broad range of products or services or that serve a broad market—are generalists. Organizations that provide a narrower range of goods or services or that serve a narrower market are specialists. Specialists are generally more competitive than generalists in the narrow area in which their domains overlap. However, the breadth of the generalist's domain serves to protect it somewhat from environmental changes. Though demand may decrease for some of the generalist's products or services, it usually increases for others at the same time. In addition, because of the diversity of products, services, and customers, generalists are able to reallocate resources internally to adapt to a changing envi- ronment, whereas specialists are not. However, because specialists are often smaller companies, they can sometimes move faster and be more flexible in adapting to changes.61 Managerial impact on company success often comes from selecting a strategy that steers a company into an open niche.

human resource sector

The human resources sector is of significant concern to every business. In China, a new labor movement is challenging business leaders with emerging labor activist groups as well as legal aid and support networks at universities promoting workers rights. Young migrant workers are using the Internet and mobile phones to organize and spread information about poor working conditions. "Every worker is a labor lawyer by himself. They know their rights better than my HR officer," said the German owner of a factory that produces cable connectors in China

international environment

The international sector can directly affect many organizations, and it has become extremely important in the last few years. The auto industry, for example, has experienced profound shifts as China recently emerged as the world's largest auto market. In response, car makers are moving international headquarters into China and designing features that appeal to the Chinese market, including bigger, limousine-like back seats, advanced entertainment systems, and light-colored interiors. These trends, inspired by the Chinese market, are reflected in models sold around the world.In addition, international events can influence all the domestic sectors of the environment.

competing values model

The model is based on the assumption that there are disagreements and competing viewpoints about what constitutes effectiveness. Managers sometimes disagree over which are the most important goals to pursue and measure.

natural sector

The natural sector of the external environment, including all elements that occur naturally on earth, is of growing importance as consumers, organizations, and managers become increasingly sensitive to diminishing natural resources and the environmental impact of a company's products and business practices. Many companies have adopted a philosophy of sustainability, which refers to economic development that meets the needs of the current generation while pre- serving the environment for the needs of future generations as well. Caesars Entertainment, one of the world's largest gaming companies, created a scorecard to keep track of how well the company was doing at reducing energy consumption, recycling waste, reducing water consumption, and meeting other "green" goals. Managers found that the more information guests had about Caesars' sustainability practices, the better they felt about the company and the more likely they were to enjoy their stay at the casino and to book future visits

mission

The overall goal for an organization is often called the mission—the organization's reason for existence. The mission describes the organization's shared values and beliefs and its reason for being.

how does the environment influence an organization

The patterns and events occurring in the environment can be described along three primary dimensions: dynamism (whether events in the environment are stable or unstable), complexity (whether the environment is simple or complex), and abundance (amount of financial resources available to support the organization's growth).

process of ecological change

The process of change in the population occurs in three stages: variation, selection, and retention

computer aided craftsmanship

The smart factory allows plants to break free of this diagonal and to increase both batch size and product flexibility at the same time. When taken to its ultimate level, the smart factory allows for mass customization, with each specific product tailored to customer specification.

symptoms of structural deficiency

There is an absence of collaboration among units. Organization structure should encourage collaboration when and where it is needed to meet organizational goals. It should enable resolution of conflicting departmental needs and goals into a single set of goals for the entire organization. When departments act at cross-purposes or are under pressure to achieve departmental goals at the expense of organizational goals, the structure is often at fault. Horizontal linkage mechanisms are not adequate. • Decision making is delayed or lacking in quality. Decision makers may be overloaded because the hierarchy funnels too many problems and decisions to them. Delegation to lower levels may be insufficient. Another cause of poor-quality decisions is that information may not reach the correct people. Information linkages in either the vertical or horizontal direction may be inadequate to ensure decision quality. • The organization does not respond innovatively to a changing environment. One reason for lack of innovation is that departments are not coordinated horizontally. The identification of customer needs by the marketing department and the identification of technological developments in the research department must be coordinated. Organization structure also has to specify departmental responsibilities that include environmental scanning and innovation. • Employee performance declines and goals are not being met. Employee performance may decline because the structure doesn't provide clear goals, responsibilities, and mechanisms for coordination and collaboration. The structure should reflect the complexity of the market environment yet be straightforward enough for employees to effectively work within.

raw materials sector

Tyson Foods is spending hundreds of millions of dollars to build 90 chicken farms in China to guarantee a supply of high-quality birds, which the company then processes and sells to fast food companies, wholesalers, and other meatpackers that use the meat in sausage and other prod- ucts. In the United States, Tyson pays independent farmers to raise chickens, but it has little control over product quality and safety in China so it decided to run its own farms, hoping safe products will build its brand in a country where the company is not well known

Chapter 5: inter-organizational relationships

are the relatively enduring resource transactions, flows, and linkages that occur among two or more organizations. Traditionally, these transactions and relationships have been seen as a necessary evil to obtain what an organization needs. The presumption has been that the world is composed of distinct businesses that thrive on autonomy and compete for supremacy. A company may be forced into interorganizational relationships depending on its needs and the instability and complexity of the environment.

vertical linkages

are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization. Employees at lower levels should carry out activities consistent with top-level goals, and top executives must be informed of activities and accomplishments at the lower levels. Organizations may use any of a variety of structural de- vices to achieve vertical linkage, including hierarchical referral, rules and plans, and formal management information systems

resource dependence theory

argues that organizations try to minimize their dependence on other organizations for the supply of important resources and try to influence the environment to make resources available. Organizations succeed by striving for independence and autonomy. When threatened by greater dependence, organizations will assert control over ex- ternal resources to minimize that dependence. When organizations feel resource or supply constraints, the resource-dependence perspective says they maneuver to maintain their autonomy through a variety of strategies.

traits that distinguish transnational

assets and resources are dispersed worldwide into highly specialized operations that are linked together through interdependent relationships. structures are flexible and ever changing. centralized subsidiary managers initiate straegy and innovations that become strategy for the corporation as a whole. unification and coordination are achieved primarily through corporate culture, shared vision and value, and management style, rather than through formal structures and systems.

REENGINEERING or business process

basically means the redesign of a vertical organization along its horizontal workflows and processes

what is the importance of organizations

bring together resources to achieve desired goals produce goods and services efficiently, facilitate innovation, use modern manufacturing and information technologies, adapt to and influence a rapidly changing environment, accommodate challenged of diversity, ethics, and coordination create value for owners, customers, employees

contingency factors: size

can be measured for the organization as a whole or for specific components, such as a plant or division. Because organizations are social systems, size is typically measured by the number of employees. Other measures such as total sales or total assets also reflect magnitude, but they do not indicate the size of the human part of the system.

what makes up a mechanistic design

centralized structure, specialized tasks, many rules formalized, vertical communication, strict hierarchy. typical contingency factors: large size, efficiency strategy, stable environment, rigid culture, manufacturing technology

mission statement

communicates to current and prospective employees, customers, investors, suppliers, and competitors what the organization stands for and what it is trying to achieve. A mission statement communicates legitimacy to internal and external stakeholders, who may join and be committed to the organization because they identify with its stated purpose and values

international division

has a status equal to the other major departments or divisions within the company and is illustrated in Exhibit 6.7. Whereas the domestic divisions are typically organized along functional or product lines, the international division is organized according to geographic interests, as illustrated in Exhibit 6.7. The international division has its own hierarchy to handle business (licensing, joint ventures) in various countries, selling the products and services created by the domestic divisions, opening subsidiary plants, and in general moving the organization into more sophisticated international operations.

tickle up innovation or reverse innovation

has companies paying attention more than ever to the need for mechanisms that encourage sharing across the international enterprise.

non-routine technologies

have high task variety, and the conversion process is not analyzable or well understood. In nonroutine technology, a great deal of effort is devoted to analyzing problems and activities. Several equally acceptable options typically can be found. Experience and technical knowledge are used to solve problems and perform the work

differentiation strategy

he organization attempts to distin- guish its products or services from others in the industry. Managers may use ad- vertising, distinctive product features, exceptional service, or new technology to achieve a product perceived as unique. This strategy usually targets customers who are not particularly concerned with price, so it can be quite profitable. (APPLE)

more difficult transfer of knowledge and innovation

he third piece of the international challenge is for organizations to learn from their international experiences by sharing knowledge and innovations across the enterprise. The diversity of the international environment offers extraordinary opportunities for learning, development of diverse capabilities, and startling innovations in products and services.

framework: simple + unstable

high-moderate uncertainty EX: electronic games, fashion, music industry, social media, toys. few external elements that change rapidly

financial resources

his sector is often the first and foremost in the minds of entrepreneurs. Many small-business owners turned to online person-to-person (P-to-P) lending networks for small loans as banks tightened their lending standards. Jeff Walsh, for example, borrowed around $22,000 through Prosper.com for his coin laundry business. Alex Kalempa needed $15,000 to expand his business of developing racing shift systems for motorcycles, but banks offered him credit lines of only $500 to $1,000. Kalempa went to LendingClub.com, where he got the $15,000 loan at an inter- est rate several points lower than the banks were offering

international sector

is also a part of the task environment because of globalization and intense competition. In August 2013, the U.S. Department of Agriculture (USDA) gave approval for four Chinese poultry processors to begin shipping cooked poultry products to the United States, which increased competition for U.S. processing plants. Not long after that decision, China's Shuanghui International Holding Ltd. began a $4.7 billion takeover of the U.S.-based pork processor Smithfield Foods Inc. to acquire new technology and improve safety practices

technology sector

is an area in which massive changes have occurred in re- cent years. Technology for mobile Internet is a rapidly growing area. Although technology has created some jobs, analysts say it is eliminating many more than it is creating. In countries from the United States to Canada to Japan, studies have found substantial drops in white-collar jobs linked to adoption of new technology. Today, software is picking out worrisome spots on medical scans, spotting profits in stock trades in milliseconds, sifting through documents for evidence in court cases, and recording power usage beamed from digital utility meters at millions of homes. A consultant estimates that 2 million jobs in human resources, finance, information technology, and procurement have disappeared in the United States and Europe since 2008 and been replaced by technology. When business conditions improve, many managers realize they don't have to rehire.

collaborative networks

is an emerging alternative to resource-dependence theory. Companies join together to become more competitive and to share scarce resources.

organizational form

is an organization's specific technology, structure, products, goals, and personnel, which can be selected or rejected by the environment.

vertical information system

is another strategy for increasing vertical information capacity. Vertical information systems include the periodic reports, written information, and computer-based communications distributed to managers. Information systems make communication up and down the hierarchy more efficient.

Stakeholder

is any group within or outside of the organization that has a stake in the organization's performance. The satisfaction level of each group can be assessed as an indication of the organization's performance and effectiveness (Daft 23) ex

institutional environment

is composed of norms and values from stakeholders (e.g., customers, investors, associations, boards, other organizations, government, and the community). The institutional environment reflects what the greater society views as correct ways of organizing and behaving

legitimacy

is defined as the general perception that an organization's actions are desirable, proper, and appropriate within the environment's system of norms, values, and beliefs.

strategic alliance

is less formal and binding than a joint venture. It is a collaborative agreement between two or more organizations that contribute resources to a common endeavor while maintaining their individuality.

reactor strategy

is not really a strategy at all. Rather, reactors respond to environmental threats and opportunities in an ad hoc fashion. With a reactor strategy, top management has not defined a long-range plan or given the organization an explicit mission or goal, so the organization takes whatever actions seem to meet immediate needs. Although the reactor strategy can sometimes be successful, it can also lead to failed companies.

virtual team

is one that is made up of organizationally or geographically dispersed members who are linked primarily through advanced information and communications technologies. Members frequently use the Internet and collaboration software to work together rather than meet face to face

core competence

is something the organization does especially well in comparison to its competitors. A core competence may be in the area of superior research and development, expert technological know-how, process efficiency, or exceptional customer service.

kaizen

is the implementation of a large number of small, incremental improvements in all areas of the organization on an ongoing basis. All employees learn that they are expected to contribute by initiating changes in their own job activities. The basic philosophy is that improving things a little bit at a time, all the time, has the highest probability of success. Innovations can start simple, and employees can build on their success in this unending process. A commitment to kaizen has allowed La-Z-Boy in Dayton, Tennessee, to thrive even during the recent recession.

organizational behavior

is the micro approach to organizations because it focuses on the individuals within organizations as the relevant units of analysis. Organizational behavior examines concepts such as motivation, leadership style, and personality and is concerned with cognitive and emotional differences among people within organizations.

rules and plans

is the next linkage device. To the extent that problems and decisions are repetitious, a rule or procedure can be established so employees know how to respond without communicating directly with their manager. Rules and procedures provide a standard information source enabling employees to be coordinated without actually communicating about every task.

retention

is the preservation and institutionalization of selected organizational forms. Certain technologies, products, and services are highly valued by the environment. The retained organizational form may become a dominant part of the environment

integration

is the quality of collaboration among departments. formal integrators are often required to coordinate departments. when the environment is highly uncertain, frequent changes require more information processing to achieve horizontal coordination, so integrators become a necessary addition to the organization structure.

prospector strategy

is to innovate, take risks, seek out new opportunities, and grow. this strategy is suited to a dynamic, growing environment, where creativity is more important than efficiency. (NIKE)>

resource dependence

mean that organizations depend on the environment but strive to acquire control over resources to minimize their dependence. Organizations are vulnerable if vital financial resources are con- trolled by other organizations, so they try to be as independent as possible. Organizations do not want to become too vulnerable to other organizations because of negative effects on performance.

multi-focused grouping

means an organization embraces two or more structural grouping alternatives simultaneously. These structural forms are often called matrix or hybrid.

horizontal grouping

means employees are organized around core work processes, the end-to-end work, information, and material flows that provide value directly to customers

divisional grouping

means people are organized according to what the organization produces. All the people required to produce toothpaste—including personnel in marketing, manufacturing, and sales—are grouped together under one executive.

multidomestic strategy

means that competition in each country is handled independently of competition in other countries. Thus, a multidomestic strategy would encourage product design, assembly, and marketing tailored to the specific needs of each country. Some companies have found that their products do not thrive in a single global market.

uncertainty

means that decision makers do not have sufficient information about environmental factors, and they have a difficult time predicting external changes. Uncertainty increases the risk of failure for organizational decisions and makes it difficult to compute costs and probabilities associated with decision alternatives.

contingency

means that one thing depends on other things, and for organizations to be effective there must be a "goodness of fit" between their design and various contingency factors.60 What works in one setting may not work in another setting. There is no "one best way." Contingency theory means it depends (Daft 28)

globalization strategy

means that product design, manufacturing, and marketing strategy are standardized throughout the world, which is less costly than creating different products for different markets

organic design

means that the organization is much looser, free-flowing, and adaptive. Rules and regulations often are not written down or, if written down, are flexibly applied. People may have to find their own way through the system to figure out what to do. The hierarchy of authority is looser and not clear-cut. Decision-making authority is decentralized.

variation

means the appearance of new, diverse forms in a population of organizations. These new organizational forms are initiated by entrepreneurs, established with venture capital by large corporations, or set up by governments seeking to provide new services

outsourcing

means to contract out certain tasks or functions, such as manufacturing, human resources, or credit processing, to other companies.

strategic constituents approach

measures effectiveness by focusing on the satisfaction of key stakeholders, those who are critical to the organization's ability to survive and thrive. The satisfaction of these strategic constituents can be assessed as an indicator of the organization's performance.

three mechanisms for institutional adaption

mimetic, coercive, normative.

structural dimensions: formalization

pertains to the amount of written documentation in the organization. Documentation includes procedures, job descriptions, regulations, and policy manuals. These written documents describe behavior and activities. Formalization is often measured by simply counting the number of pages of docu- mentation within the organization. Large universities, for example, tend to be high on formalization because they have several volumes of written rules for such things as registration, dropping and adding classes, student associations, dormitory governance, and financial assistance. A small, family-owned business, in contrast, may have almost no written rules and would be considered informal.

functional groupings

places together employees who perform similar functions or work processes or who bring similar knowledge and skills to bear. For example, all marketing people work together under the same supervisor, as do all manufacturing employees, all human resources people, and all engineers.

service technology

produces intangible output, abstract and often consists of knowledge and ideas, and characterized by simultaneous production and consumption, labor and knowledge intensive, direct interaction between customer and employees

what are outputs

products and services

internorganizational linkages

provide a kind of safety net that encourages long-term investment, information sharing, and risk taking. Organizations can achieve higher levels of innovation and performance as they learn to shift from an adversarial to a partnership mindset.

structural dimensions

provide labels to describe the internal characteristics of an organization. They create a basis for measuring and comparing organizations.

relational coordination

refers to "frequent, timely, problem-solving communication carried out through relationships of shared goals, shared knowledge, and mutual respect." Building relational coordination into the fabric of the organization requires the active role of managers. Managers invest in training people in the skills needed to interact with one another and resolve cross-functional conflicts, build trust and credibility by showing they care about employees, and intentionally foster relation- ships based on shared goals rather than emphasizing goals of the separate depart- ments. People are given freedom from strict work rules so they have the flexibility to interact and contribute wherever they are needed, and rewards are based on team efforts and accomplishments.

differentiation

refers to "the differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments.

Process

refers to an organized group of related tasks and activities that work together to transform inputs into outputs that create value for customers.73 Examples of processes include order fulfillment, new product development, and customer service. Reengineering changes the way managers think about how work is done. Rather than focusing on narrow jobs structured into dis- tinct functional departments, they emphasize core processes that cut horizontally across the organization and involve teams of employees working together to serve customers.

horizontal linkages

refers to communication and coordination horizontally across organizational departments.

complexity

refers to heterogeneity, or the number and dissimilarity of external elements (e.g., competitors, suppliers, industry changes, government regulations) that affect an organization's operations. The more external elements regularly influence the organization and the greater the number of other companies in an organization's domain, the greater the complexity. A complex environment is one in which the organization interacts with and is influenced by numerous diverse external elements. In a simple environment, the organization interacts with and is influenced by only a few similar external elements.

structural dimensions: centralization

refers to the hierarchical level that has authority to make decisions. When decision making is kept at the top level, the organization is centralized. When decisions are delegated to lower organizational levels, it is decentralized. Examples of organizational decisions that might be centralized or decentralized include purchasing equipment, establishing goals, choosing suppliers, setting prices, hiring employees, and deciding marketing territories.

structural dimensions: complexity

refers to the number of distinct departments or activities within the organization. Complexity can be measured along three dimensions: vertical, horizontal, and spatial. Vertical complexity is the number of levels in the hierarchy. Different organizational levels possess different stores of knowledge and expertise. Horizontal complexity is the number of departments or occupational specialties existing horizontally across the organization. Spatial complexity is the degree to which an organization's departments and personnel are dispersed geographically. The organization in Exhibit 1.4 has a vertical complexity of five levels. Its horizontal complexity at level 3 would be seven departments. Spatial complexity would be 1 since the offices are all in the same location.

contingency factors: organizational technology

refers to the tools, techniques, and actions used to transform inputs into outputs. It concerns how the organization actually pro- duces the products and services it provides for customers and includes such things as flexible manufacturing, advanced information systems, and the Internet. An automobile assembly line, a college classroom, and an overnight package delivery system are technologies, although they differ from one another.

manufacturing technology

refers to the work processes, techniques, machines, and actions used to transform organizational inputs (materials, information, ideas) into outputs (products and services).4 Technology is an organization's production process and includes work procedures as well as machinery. One important theme in this chapter is how core technology influences organization design.

competitive advantage

refers to what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace. competitive openings and learn what new capabilities the organization needs to gain the upper hand against other companies in the industry

selection

refers to whether a new organizational form is suited to the environment and can survive. Only a few variations are "selected in" by the environment and survive over the long term. Some variations will suit the external environment better than others. Some prove beneficial and thus are able to find a niche and acquire the resources from the environment necessary to survive. Other variations fail to meet the needs of the environment and perish. When there is insufficient demand for a firm's product or service and when insufficient resources are available to the organization, that organization will be "selected out."

transnational model

represents the most advanced kind of international organization. It reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts. The transnational model is useful for large, multinational companies with subsidiaries in many countries that try to exploit both global and local advantages as well as technological advancements, rapid innovation, and global learning and knowledge sharing. Rather than building capabilities primarily in one area, such as global efficiency, local responsiveness, or global learning, the transnational model seeks to achieve all three simultaneously. Dealing with multiple, interrelated, complex issues requires a complex form of organization and structure.

organization design alternatives

required work activities, reporting relationships, and departmental groupings

interorganizational framework

resource dependency, collaborative network, population ecology, and institutionalism.

normative forces

result from common training and professionalism. are pressures to achieve standards of professionalism and to adopt techniques that are considered by the professional community to be up to date and effective. Changes may be in any area, such as information technology, accounting requirements, marketing techniques, or collaborative relationships with other organizations

joint ventures

result in the creation of a new organization that is formally independent of the parents, although the parents will have some control.

mimetic

results from responses to uncertainty. the pressures to copy or model other organizations,

expanded coordination roles

rganizations may also implement structural solutions to achieve stronger coordination and collaboration.96 Creating specific organizational roles or positions for coordination is a way to integrate all the pieces of the enterprise to achieve a strong competitive position. In successful international firms, the role of top functional managers, for example, is expanded to include responsibility for coordinating across countries, identifying and linking the organization's expertise and resources worldwide. In an international organization, the manufacturing manager has to be aware of and coordinate with manufacturing operations of the company in various parts of the world so that the company achieves manufacturing efficiency and shares technology and ideas across units.

virtual network grouping

s the most recent approach to departmental grouping. With this grouping, the organization is a loosely connected cluster of separate components. In essence, departments are separate organizations that are electronically connected for the sharing of information and completion of tasks. Departments can be spread all over the world rather than located together in one geographic location.

contingency factors: culture

s the underlying set of key values, beliefs, understand- ings, and norms shared by employees. These underlying values and norms may pertain to ethical behavior, commitment to employees, efficiency, or customer service, and they provide the glue to hold organization members together. An organization's culture is unwritten but can be observed in its stories, slogans, ceremonies, dress, and office layout.

engineering technologies

tend to be complex because there is substantial variety in the tasks performed. However, the various activities are usually handled on the basis of established formulas, procedures, and techniques. Employees normally refer to a well-developed body of knowledge to handle problems. Engineering and accounting tasks usually fall in this category.

hybrid structure

that combines characteristics of various approaches tailored to specific strategic needs. Most companies combine characteristics of functional, divisional, geographic, horizontal, or network structures to take advantage of the strengths of various structures and avoid some of the weaknesses. Hybrid structures tend to be used in rapidly changing environments because they offer the organization greater flexibility.

customized output

that is, providing exactly the service each customer wants and needs. When you visit a hairstylist, you don't automatically get the same cut the stylist gave the three previous clients. The stylist cuts your hair the way you request it.

efficiency

the amount of resources used to achieve the organization's goals. its based on the quantity of raw materials, money, and emloyees necessary to produce a given level of output

continuous process production

the entire process is mechanized. There is no starting and stopping. This represents mechanization and standardization one step beyond those in an assembly line. Automated machines control the continuous process, and outcomes are highly predictable. Amazon's new fully automated distribution centers could be con- sidered continuous-process production.

virtual network structure

the firm subcontracts most of its major functions or processes to separate companies and coordinates their activities from a small headquarters organization.

global product structure

the product divisions take responsibility for global operations in their specific product area. This is one of the most commonly used structures through which managers attempt to achieve global goals because it provides a fairly straightforward way to effectively manage a variety of businesses and products around the world. Managers in each product division can focus on organizing for international operations as they see fit and directing employees' energy toward their own division's unique set of global problems or opportunities.72 In addition, the structure provides top managers at headquarters with a broad perspective on competition, enabling the entire corporation to respond more rapidly to a changing global environment.

industry sector

the retail industry in South Korea has always been dominated by big department stores, but as smartphone use has surged in the country over the past few years, companies saw new ways to reach consumers. South Korea has a low number of women in the workforce, so there is a ready audience of affluent television and Internet shoppers. Online and home shopping competitors are growing in popularity, and posters on subway station walls allow people to make purchases simply by snapping a picture of a barcode

bureaucratic organizations

which emphasized designing and managing organizations on an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal recordkeeping, and uniform application of standard rules. Although the term bureaucracy has taken on negative connotations in today's organizations, bureaucratic characteristics worked extremely well for the needs of the Industrial Age. One problem with the classical perspective, however, is that it failed to consider the social context and human needs.

operations roles

which have traditional vertical authority and are accountable for business results primarily through direct control over people and resources

stakeholder approach

which integrates diverse organizational activities by looking at various organizational stakeholders and what they want from the organization.

resolving hybrid conflict: coalitional management

which involves building an alliance of people who support a manager's goals and can influence other people to accept and work toward them.30 Managers talk to people across the organization to find out what challenges and opportunities they face. They learn not only who supports their goals but also who opposes them and why.

task variety

which is the frequency of unexpected and novel events that occur in the conversion process. Task variety concerns whether work activities are performed the same way every time or differ from time to time as employees transform the organization's inputs into outputs.72 When individuals encounter a large number of unexpected situations, with frequent problems, variety is considered high. When there are few problems, and when day-to-day job requirements are repetitious, technology contains little variety. Variety in departments can range from repeating a single act, such as on a traditional assembly line, to working on a series of unrelated problems, such as in a hospital emergency room.

global stage

which means the company transcends any single country. The business is not merely a collection of domestic industries; rather, subsidiaries are interlinked to the point where competitive position in one country significantly influences activities in other countries.30 Truly global companies no longer think of themselves as having a single home country and, indeed, have been called stateless corporations.31 This represents a new and dramatic evolution from the multinational company of the 1960s and 1970s. At this stage, ownership, control, and top management tend to be dispersed among several nationalities.

Horizontal structure

which organizes employees around core processes. Organizations typically shift toward a horizontal structure during a procedure called reengineering

official goals

which refers to the formally stated definition of business scope and outcomes the organization is trying to achieve. Official goal statements typically define business operations and may focus on values, markets, and customers that distinguish the organization.

one approach to boundary spanning is business itelligence

which refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant.

mass customization

which refers to using mass-production technology to quickly and cost-effectively assemble goods that are uniquely designed to fit the demands of individual customers. The goal is to provide customers with exactly what they want when they want it.45 Mass customization has been applied to products as diverse as farm machinery, water heaters, clothing, computers, and industrial deter- gents.

core technology

work process that is directly related to the organization's mission, such as teaching in a high school, medical services in a health clinic, or manufacturing at American Axle & Manufacturing (AAM). At AAM, the core technology begins with raw materials (e.g., steel, aluminum, and composite metals).