MGMT Exam 2

Downsizing

A process designed to reduce inefficiency and waste that build ups in an organization over time in an effort to be more competitive.

Subcultures

Cultures that form around a geographic or organizational units in a company.

Strong culture

1) Can lead to better levels of performance, higher financial metrics, and distinctive competitive advantage. 2) Promotes ethical guidelines that define acceptable and unacceptable behavior, helping the organization require less coordination and monitoring. 3) Clarifies roles by being explicit about what is expected in an organization.

Initiation

1st stage of organizational stages of growth. Characterized by loose, informal management; basic salary and benefits; flexible job definitions.

Benchmarking Process

5 steps: 1) Identifying the processes to benchmark. 2) Choosing measurement criteria and collecting data. 3) Finding the best companies for each process. 4) Harvesting and analyzing data. 5) Creating plans for improvement.

Assumption

A behavior that stemmed from a belief held by a group that is no longer visible, but has become deeply embedded in the organization.

Survivor syndrome

A condition that can occur when certain employees who survive a downsizing become narrow-minded, self-absorbed, resentful, or risk averse.

Six sigma

A disciplined, quantitative approach to improve cycle time, reduce costs, and eliminate waste with a technical goal of 3.4 defects per million (six standard deviations from the mean). Used to quickly reduce operating costs in search of a competitive advantage. Uses a method uses a method known as DMAIC, which stands for define, measure, analyze, improve, and control. It entails defining a problem precisely, measuring to clarify the process, analyzing the process to identify root problems, improving the process by considering several solutions, and controlling through ongoing measurements to ensure the problem does not recur.

Silos

A functional or divisional unit that operates by its own rules and guidelines and does not openly share information with other units.

Development

A longer-term, ongoing process of training that improves an employee's personal abilities over time. Attracts higher quality employees and keeps them more engaged with the company. Is most effective when the organization's needs are aligned with individual career needs.

Balanced Scorecard

A method created to help businesses translate strategy into action by identifying the most critical measures to drive business success and linking long term strategic goals with short term operational actions; it uses four perspectives (financial, customer, business process, and learning and growth. Aligns the goals of an organization with the day-to-day action of individual employees. Benefit: its facilitation of communication about strategy throughout an organization. prioritizes measures that help a company achieve its strategy, a company can choose to focus on future customers without sacrificing service to their existing customers. Complements already used measurements by a company; It identifies new processes to achieve strategic goals, sets strategic priorities, and integrates multiple programs into an ongoing management process and strategic framework.

Needs assessment

A process by which an organization outlines what type of training needs to be done and who is best positioned to deliver it.

Internal Fit

A process of building and aligning HR practices in support of the company's strategy. Can become a source of competitive advantage if they satisfy four requirements: 1) those resources must add value to the firm. 2) they cannot exist outside of the company 3) they cannot be easily imitated by other companies. 4) they cannot be substituted by another resource.

Cause-effect relationships

A set of quantitative and qualitative measurements that are related and mutually reinforcing. A primary advantage of the balanced scorecard. It allows companies to quickly look at failures and isolate what may be the root cause of them. At the same time, it also allows them to understand the source of their successes. This means that companies take all of the necessary actions to achieve competitive advantage in the industry and remove excessive activity that does not support the overall strategy and vision. Builds strategy map that links performance measure and how an organization operates.

If then relationship

A simple and effective way of analyzing cause-effect relationships. These link measurements from the foundational level—the learning and growth perspective—to the highest level—the financial perspective. Ex. If we increase employee training programs about products, then employees will become more knowledgeable about the full range of products they can sell.

Functional structure

A structure that organizes a firm in terms of the main activities that need to be performed, such as production, marketing, sales, and accounting. While employees strive for numerous goals in the _______, their career progression is often determined by a department's success. Each _______ department typically conducts its own budgeting and planning processes separate from those of the larger organization. Works well for small businesses and businesses with a limited number of products or service. Supports easy flow of communication, a straightforward approach to supervision, and a reduced level of redundancy. Benefits: the expertise and efficiency it creates. Optimal for creating economies of scale because these environments tend to be more stable and less complex than other environments. Weakness: inability to deal with changes in the business environment.

Network structure

A structure where "knowledge workers" are organized to work as individual contributors or to be a part of a work cluster that provides a certain expertise for the organization. Coordination among knowledge workers is often achieved through cross-functional teams, some in the organization and some outside of the organization. The goal of these teams is to bring together different combinations of workers and help coordinate their actions. Cross functional teams can be seen as both permanent and temporary. Emphasis on informal structure of a firm. Allows firms to move quickly to adapt a change in the marketplace or respond to a competitors action. This capability can be a source of competitive advantage in industries that are marked by high degrees of change or innovation.

Matrix structure

A structure where both divisional and functional managers have equal authority in the organization. In many organizations, managers find that they need technological expertise within functions and horizontal coordination across the functions. Appropriate when: 1) environmental pressures derive from both functional and product sources, an organization should adopt a ______ to preserve the balance of power of both groups. 2) a manager should consider a ________ when a firm's internal interrelationships are complex. In these types of organizations, there is a high degree of interdependence between departments. 3) when resources need to be shared and optimized across divisions and within functions. The _____ can be adapted to address all of these conditions by flexibly allocating resources among functions and divisions. Weakness: creates confusing and inefficient scenarios for managers working in a functional group as well as across divisions. Need frequent meetings between divisional and functional groups. In a _____, managers can no longer rely on vertical authority; rather, they must build an organization that communicates and shares resources across functions and divisions.

360 degree feedback

A system in which employees conduct a self-assessment of key competencies and then compare their responses to others in the organization including managers, peers, direct reports, and clients. Advantages: 1) Self assessment has been shown to help individuals with career planning and decision making. 2) provides employees with a realistic view of their skills, capabilities, and behaviors. 3) effective tool in the leadership development process since it identifies potential areas for improvement.

Gain sharing

A team based compensation structure that rewards teams based on the achievement of certain metrics associated with productivity, efficiency, or quality.

Profit sharing

A team based compensation structure that shares rewards based on improvements in profitablility.

Clan approach

A type of organizational control that includes self-supervising teams that are responsible for a set of tasks. Each member is cross-trained to be able to perform multiple tasks, and individual goals and values completely overlap with the organization's values. One of the key advantages to the _____ is the self-regulating characteristics of its employees. Workers collaborate on projects and must negotiate proper team behavior, often using the organization's mission and values as a guide. Preferred when conditions are uncertain and work activities are difficult to measure

Activity based costing

Accounting system used to assess the specific cost components of producing a product or service. Links production to a series of activities and assigns a cost to each activity, providing a more accurate picture of how to minimize costs by focusing on the activities that contribute to production.

Cafeteria plans

An arrangement that allows employees to make their own choices about benefit options.

Centralized organization

An organizational structure characterized by formal structures that control employee behavior by concentrating decisions in a top-down, hierarchical fashion. Often seen in a functional organizational structure. Tend to be larger and older, and they exist in more mature industries.

Decentralized organization

An organizational structure where key decisions are made at all levels of the firm, not mandated from the top. Proivde more flexibility to react to environmental threats and opportunities because they attract highly skilled employees, coordinate efforts through standardization, and allow more individual-level decision making

Job analysis

Analyzing information about specific job tasks in order to provide a more precise job description and define the characteristics of the ideal candidate for the position. Can be conducted with interviews with management and current jobholders, observations in the workplace, and self-administered questionnaires. The absence of an accurate ______ can lead to problems such as increased recruiting costs, inequities among employees, inadequate job preparation, and wasted training resources

Structured Interviews

Ask candidate four types of questions: situational questions, behavioral questions, background questions, and job knowledge questions.

Financial Perspective

Choosing the financial measurements that are most important for reaching strategic goals. Traditional measurements include: cost of goods sold, administrative expenses, inventories, accounts receivable, return on equity, and return on assets. New measurements include activity based costing (ABC). Measurements should be aligned to the life cycle of a business (growth, sustain, and harvest stages).

Role of teams

Directly impact culture by the manner in which they: encounter big problems, solve those problems, and percieve the effects of their solutions. A course of action prescribed by a founder has to be tried and tested by employees before it becomes an integral part of an organization's culture.

Business process perspective

Focuses on measurements that will improve a company's ability to serve and deliver value propositions to its customers. Internal business processes are important because they represent the day-to-day operations that deliver products and services to customers. Managers identify the most important processes to achieve the best results

Tough guy, Macho Culture

Found in entertainment industry, sports teams, advertisings. Individuals who enjoy risk and who get quick feedback about their decisions. All-or-nothing culture: Successful employees are the ones who enjoy excitement and work very hard to be stars, and All others are second class citizens. Teamwork is not highly valued. Difficult environment for people who blossom slowly (high turnover, which impedes efforts to build a cohesive culture)

Process Culture

Found in large retailers, banks, insurance companies, and governmental organizations. No single transaction has much impact on organization's success and it takes years to find out whether a decision was good or bad. Employees find it difficult to measure what they do so they focus instead on how they do things. High value on technical excellence. Pay attention to getting the process and details right. Not always measuring actual outcome.

Bet-your-company culture

Found in pharmaceutical, oil and gas companies, architectural firms and organizations in other large, capital intensive industries. Decisions are high risk but employees may wait years before they know whether their actions payed off. Special because: long term focused; collective belief in the need to plan, prepare and perform due diligence at all stages of decision making.

Work Hard - Play Hard culture

Found in sales. Employees themselves take few risk, feedback on how well they are performing is almost immediate. Employees have high levels of energy and stay upbeat. Heroes in such cultures are high volume salespeople. What is special about this culture: Recognition that one person alone cannot make the company, team effort and everyone is driven to excel, and contests among employees are common, as they drive employees to reach new heights.

Budgets

Generally created at both the corporate and department or business unit level. Typically includes revenue and cost projections for each unit, and these projections are used to allocate resources (for instance, human resources, capital equipment, and R&D funding) throughout the company. used to measure the performance of a particular unit or department. These measurements generally occur monthly and include a comparison of actual revenue achieved and costs incurred against _____ expectations. Used in step 2 (setting performance targets) of the control cycle.

Organizational Leaders

Held responsible for results and significantly influence the manner in which those results are achieved as well as the values that are upheld.as role models, leaders must be vigilant that their actions or deeds do not result in unintended consequences. A strong culture can put pressure on an employee to act a certain way. _______ often have the responsibility of ensuring that the culture reinforces positive behavior. Roles: 1) Inspire all managers and employees to do their best. 2) Empower employees and managers to make independent decisions and to find ways to improve operations. 3) Reward achievement with pay based performance and continue raising the bar. 4) Reward achievement with nonpay perks such as new assignments and employee recognition. 5) Create a challenging work environment. 6) Establish and abide by a clear set of values.

High-performance context

High performance management + high support and trust.

Burnout context

High performance management + low support/trust.

Baby boomers

High quality colleagues, flexibility, access to new challenges, recognition from one's company or boss, intellectually stimulating workplace, autonomy, opportunity to give back to the world

Generation Y

High quality colleagues, flexibility, access to new challenges, recognition from one's company or boss, prospects for advancement, steady rate of advancement.

Country club context

High support and trust. Low performance management.

External adaption

How environmental changes impact a firm's strategy.

Internal integration

How work is accomplished in a firm

Learning and Growth Perspective

Identifies the infrastructure and skills needed to carry out business processes, interact with customers, and achieve long-term financial growth; it also helps to identify gaps in capabilities or resources. Employee growth is instrumental for innovation and long-term success and is best pursued through an environment that encourages risk and tolerates failure. Uses employee measurements (employee satisfaction, productivity, and retention to better understand employee issues or concerns), information systems (stimulate learning and growth by giving employees the necessary information to be effective and innovative), and employee motivation.

Founder

In formal organizations, the backbone of culture generally begins with a ____. Usually comes to his or her organization with a strong set of assumptions based on previous experiences and infuses them into the group. Roles: 1) Their capacity to absorb the anxiety associated with risk. 2) Their capacity to make assumptions stick. 3) Their encouragement of innovation.

Sustainable technologies

Innovative forces that improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued. Focus on ______ may may hurt their organizations. The same focus that made these organizations great in the past—concentrating on mainstream customers' needs—may lead them to make bad decisions concerning disruptive innovations

Disruptive technologies

Innovative forces that include a different set of attributes than those valued by mainstream customers. These attributes generally appear to satisfy a small subset of the market and often do not initially appear to be very compelling or valuable. When these appear, managers can turn to one of three options: 1) create a separate in house organization where new processes are developed. 2) divide and create an independent organization designed specifically to build new innovation. 3) buy the capacity to handle and build the new innovation by acquiring another company that has the resources to do so.

Customer perspective

Linking key customer based metrics such as market share and retention to the financial performance of the firm. Used by managers to identify the most important customers of the business and to measure how well the company is doing in meeting or exceeding these customers' needs. Key metrics: market share, account share, customer retention, new customer acquisition, customer satisfaction, and customer profitability. Beyond generic outcomes are the value propositions.

Low performance management.

Low performance management + low support and trust.

Ambidextrous organizations

Maintain efficiency in current strategic operations while preparing for imminent changes. Create a separate team to work on future opportunities while the rest of the firm focuses on primary business. Advantage: creates a forum for innovation and creativity .

Outcomes

Measurements of the balanced scorecard that monitor past success. Generic measurements commonly used in business, such as profitability, market share, customer satisfaction, customer retention, and employee skills

Drivers

Measurements of the balanced scorecard that predict future success. More unique to company strategy and are the key factors in predicting future success.

Goals

Must be fair, challenging, and legitimate. If ____ too easy or simple, it will limit performance. ____ too difficult/tasks to challenging, it will demotivate employees. Peak performance is achieved if _____ are challenging but attainable.

Offshoring

Outsourcing a business activity to a contractor in a foreign country.

Skill-based pay

Pay is determined by an individual's personal skills and knowledge

Job based pay

Pay that is determined by the nature of a particular job.

Organizations

Primary mechanisms by which individuals (and their firms) come together to create desired outcomes.

Value Propositions

Quantitative and qualitative aspects of products or services that customers value most. Key drivers of outcomes when customer metrics are used.

Training and Developing Employees

Reasons: Need to orient employees on business practices, teach new skills with a new piece of equipment, educate on new product or service offerings. To be effective, training should fit internally with the structure and culture of the organization and externally with the strategic, competitive landscape. Training types include formal (on the job, off the job) and informal (coaching and mentoring).

Organization's culture

Represents the invisible rules that guide employees' behaviors and hence defines how people think, feel, and act and it functions at an almost subconscious level.As organizations evolve and the contextual landscape changes, they often need to adjust their cultures, which can involve reinforcing what works, eliminating what does not work, and shaping new rituals or activities. In this sense, culture is dynamic.

Selecting talent

Reviewing qualitative and quantitative data, using social media to learn more about potential, reviewing a candidate's past work history, situational interviews - asking to explain how a candidate would respond in various situations likely to occur on the job (helps predict future behavior and helps understand candidate's analytical ability). Final step is reference checks.

Decision rights

Rights that include initiating, approving, implementing, and controlling various types of strategic or tactical decisions. Along the vertical dimension, a manager must decide whether decisions are made in a centralized or decentralized manner. Along the horizontal dimension, a manager must decide who has rights to make decisions at the same level in an organization.

Functional Growth

Stage 2 of organizational stages of growth. Responding to business needs in compensation and benefits; add training and development programs; recruit specialists.

Controlled Growth

Stage 3 of organizational stages of growth. Formalized control measurements and goals; routine performance appraisals; more formal control mechanisms; more well defined job roles and functions

Functional Integration

Stage 4 of organizational stages of growth. Long range planning; generate interdisciplinary training programs; succession planning; more formal planning and hiring cycles.

Strategic Integration

Stage 5 of organizational stages of growth. HR fully integrated with strategic direction; long range planning; training and development programs focused on strategic issues.

Behavior

The actions and decisions of individual employees. Part of Identifying measures of the control cycle. More flexible and diverse than outputs; therefore, they are controlled at the unit or departmental level

Total cycle time

The amount of time required to develop and deliver products and services to customers. 3 ways it improves quality: 1) As companies use flow charts, cause-effect diagrams, and statistical tools to reduce cycle time, deficiencies in materials and processes are revealed, providing more opportunities to improve quality. 2) reducing cycle time often reduces the number of steps involved from production to delivery; as a result, the number of handoffs, parts, and delays decrease and there are fewer chances for mistakes. 3) labor and overhead costs decrease, inventories are cut, and rework is reduced.

Organizational commitment

The desired end result of socialization whereby employees become committed to the organization and its goals. 1) compliance (commitment to a firm based on fair exchange, such as pay for services). 2) identification (commitment to a firm based on a sense of belonging). 3) Internalization (commitment to a firm based on an alignment to a firm's values with individual values).

Harvest Stage

The end of a business lifecycle, where a company attempts to extract as much money as possible from the business activity. In this stage, profitability measurements are most important.

Organizational Design

The formal systems, levers, and decisions an organization adopts or employs in pursuit of its strategy.

Control Cycle

The four-stage process that provides the mechanisms and systems to monitor the transformation process, ensuring that outputs are produced to the desired quality, quantity, and specifications of an organization and its customers. Identify measures -> set targets -> measure results -> take corrective action.

Performance appraisal

The identification, measurement, and management of individual performance in organizations. Used to assess and measure performance over a certain period of time (generally 1 year). Used when a decision needs to be made on working conditions, promotions, terminations, and rewards; and used by by organizations to improve performance on measurable goals..

Division of Labor

The manner in which work in a firm is divided among employees. Managers must make several important decisions about _____. 1) the manager must decide on the vertical specialization (refers to how much an employees creates, executes, and administers activities in a certain area of the firm) and the horizontal specialization (refers to the breath of activities that are performed in a certain job) of jobs. 2) the manager also needs to be aware of trade-offs inherent in this decision. the creation of highly specialized jobs can help a firm develop expertise or competency in a certain skill or function. On the contrary, extreme specialization can lead to low job satisfaction for a worker, especially if that specialization results in tedious, repetitive work.

Beliefs and Values

The meanings that members of an organization attach to artifacts.

Organizational Structure

The pattern of organizational roles, relationships, and procedures that enable coordinated action among employees. Involves a detailed analysis about a firm's capabilities, the competitive environment, and the overall context. Serves three primary functions: 1) an ________ allows a firm to perform a variety of activities by dividing the firm's labor force according to tasks and functions. 2) an ______ allows the members of a firm to coordinate their activities through mechanisms such as supervision, formal rules and procedures, plans and budgets, training, and socialization. 3) an ______defines the borders of a firm and its relationships with both the business environment and other firms. Three basic structures: functional, divisional, and matrix. Network is also a structure.

Socialization

The process by understanding how work gets done and how individuals should interact. The process of cultural _______ can take the following forms: 1) Formal statements of philosophy, creeds, and values. 2) Design of physical spaces. 3) Role modeling, leader examples, teaching, and coaching. 4) Reward systems and norms. 5) Stories, legends, myths, and parables. 6) What do leaders pay attention to, measure, and control. 7) Leader reactions to critical incidents and crises. 8) Design of the organization. 9) Criteria for recruiting, selecting, promoting, and managing employees.

Mutual Adaptation

The process by which firms impact the nature of their overarching industrial environment and adapt their organization in response to evolving contextual factors. Critically important in industries where change is constant, such as technology and fashion.

Delegation

The process by which managers transfer decision rights to individual employees.

Collective bargaining

The process by which union representatives negotiate with management of a firm to secure certain concessions on wages, benefits, job security, or seniority for union members.

Budgeting process

The process for allocating financial resources and measuring expected quantitative and qualitative outcomes of a firm. Plays important role in providing an annual financial yardstick with which to measure progress. Although recent research suggests that ______ is outdated and hampers organizational potential, it still remains the primary management system for setting short-term targets, allocating resources, and reviewing performance. Used in step 2 (setting performance targets) of the control cycle.

Benchmarking

The process of collecting data from the industry's best players and using their numbers as a goal or guideline for evaluating company performance. promotes competition and reveals best practices so that they can be analyzed, adopted, and implemented throughout an industry. Internal benefits: simulates an unbiased review of internal operations, reveals problems for which others have found solutions, and provides objective data and targets for improvement. The most difficult hurdle to overcome is finding partners. Costly because few companies collect and share data.

Measurement

The process of evaluating behaviors and outputs to see whether standards have been met or objectives have been obtained.

Management by objectives (MBO)

The process of managing employees by outlining a series of specific objectives or milestones that they are expected to meet in a defined time period. Derives its content from scientific management.

External Fit

The process of matching a firm's structure systems, HR, management practices to the competitive landscape. Strong ____ supports the streategy of a company. Five stages: Initiation, Functional Growth, Controlled Growth, Functional Integration, Strategic Integration.

Strategic control

The process of recalibrating the firm's strategy in light of changes in the environment. The control cycle includes a mechanism to improve a business's response to the external environment called ______. Step 4: taking corrective action. Continually asks whether the current strategy is the best one to pursue and makes changes when necessary. Because environmental change can occur spontaneously or steadily, a business should set up a dual process to account for different posibilities: 1) conduct annual review of strategy, comparing the organization's performance to standards and assessing assumptions, opportunities, threats in the market. 2) continually collect and analyze data from the environment, making it a continous process in order to implement timely changes

Organizational change

The processes and activities that organizations go through to align themselves with internal and external changes in the business environment and to prepare for future potential opportunities. External change driven by external environment: increasing globalization, proliferation of technologies, and disruptive innovation. Reasons for beginning ______ include: to compete more effectively, to improve performance, and to survive as a competitor. Required when strategy and capabilities are out of alignment with new competitive realities.

Outputs

The products and/or services that an organization produces. Can be specified for an entire organization, such as the number of laptops manufactured by Apple, or for departments of an organization, such as the number of software updates for the iTunes division.

Growth Stage

The stage at the beginning of the business cycle that is marked by high investment activity. Key measures in this phase are focused on market share

Sustain stage

The stage in a business life cycle where the company is investing and extracting money, trying to maximize its return on investment. Traditional financial measures such as return on capital, operating income, and gross margins are appropriate for this stage.

Culture

The way individuals in an organization uniquely and collectively think, feel, and act. A pattern of shared basic assumptions that was learned by a group as it solved its problems ... that has worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. Elements: 1) An appreciation of the company's values and philosophy or purpose. 2) an understanding of the group's boundaries. 3) An understanding of the power structure in a company. 4) An understanding of the work rules and norms. 5) An evaluation of the company's rewards and punishment system.

Organizers

Those who believe that more control is warranted in organizational design to ensure that jobs are performed satisfactory and efficiently. Leads to grater job standardization, clear and specific definitions of roles and responsibilities, and more hierarchical leadership. Ex. Fast-food retail chains. An extreme form would be Weber's bureaucratic approach.

Behaviorists

Those who support a more open organizational structure where roles and responsibilities are loosely defined. Believe control leads to lower job satisfaction, inertia, and lack of creativity.

Total Quality Management

Ultimate goal of satisfying customer needs through a set of four reinforcing principles: customer focus, process focus, teamwork and participation, and continuous improvement. While it satisfies customers (which translates to higher market share, better customer retention, more loyal customers, and higher prices), high quality also allows companies to easily move into new markets and acquire new customers. Formal measurement tools such as sampling, statistical analysis, benchmarking, and run charts are typically used. Total cycle time is also used.

Selection tests

Used to measure qualities that are directly and indirectly related to doing well on the job. Types of tests include: specific ability tests, cognitive ability tests, biographical data (biodata), personality tests, and work sample tests.

Artifacts

Visible organizational structures, processes, and languages. The most visible level of culture is a company's _____, yet ____ are merely the surface of culture. Include "all the phenomena that one sees, hears, and feels when one encounters a new group with an unfamiliar culture. Artifacts include the visible products of the group ... its language; its technology; its artistic creations; its style ... its published lists of values; its observable rituals and ceremonies". Ex. dress code, offices.

Realistic job preview

When an organization provides information to job candidates that highlights the most important conditions of a job including its positive and negative aspects. May lead to a smaller pool of applicants due to inclusion of negative aspects.

Divisional structure

a structure that groups diverse functions into separate divisions. Organized around the outputs the firm produces (products or services) instead of the functions that are needed to produce those goods (e.g., sales and production). Different than functional form in several ways. 1) employees tend to feel more loyal toward their division than their function. 2) the ____ form allows for greater accountability. In many ways, the division is a business within a business. 3) Coordination among functions in the divisional structure is more fluid and easier than it is in a pure functional structure. This structure is best suited for business environments with high degrees of uncertainty requiring a quick response to market shifts. Disadvantages: 1) core functions are duplicated in each division, preventing the development of economies of scale. 2) the potential for competitive behavior between divisions. divisions may act in own self interest rather than the firm's overall best interest. 3) divisional structures often do not develop the same level of functional expertise that a pure functional structure can. best suited for firms that operate in a diverse business environment and compete based on a strategy of producing multiple lines of products, serving different geographical regions, or serving a diverse set of customers

ISO 9000

an international control mechanism that pursues high-quality products by ensuring high-quality processes. Concentrates on the process of production, while TQM and Six Sigma focus on improving products. It does not provide a method to improve the end product, but requires organizations to document and measure every part of the process that contributes to the quality of an end product. To become certified, a company (and its suppliers) must meet the _____ standards of quality. Criticisms: Very costly