FEKG11 ORG

Big-company/small-company hybrid:

model in which the stability and big resources of a big company is combined with the flexibility and simplicity of a small company. This can be accomplished by using the divisional structure either to reorganize into smaller divisions or select particular promising divisions and focusing on them.

Operative goals

the mission is broken down to more concrete goals. They are related to key tasks (short-term), more well-defined and measurable. These goals can be of different categories, for example: a. Overall performance - growth, profitability, output volume... b. Resources - financial resources and material from the environment. c. Market - market share or market standing. d. Employee development - training, promotion, health and growth of employees. e. Innovation and change - internal flexibility and readiness to adapt, learning. f. Productivity - the amount of output achieved from available resources.

Mission / official goals

the officially stated goal, often written down and for the long term. It communicates what the organization stands for and what it's trying to achieve.

Organizational culture:

values, norms, guiding beliefs and understanding that is shared by the organization's members and taught to new members.

Political model

when groups have separate interests, goals and values disagreement is normal, and a system with politics and power is needed to make sure things run smoothly, and to actually be able to accomplish objectives.

Job design

- Job rotation → switching tasks between employees to reduce boredom - Job simplification → variety and difficulty of tasks performed by a single person are reduced, maybe because of machinery that substitutes humans. - Job enrichment → giving employees more to do, and at a higher level - Job enlargement → giving employee more tasks to do, but as same level as before

Lean manufacturing

- Lean manufacturing uses employees instead of technologies. - Their job is to assess every part of the production to cut waste and improve quality. - Employees are trained to "think lean". One example could be not having a warehouse, but just manufacturing for actual demand.

Manufacturing technology:

- Tangible outputs - Little direct customer interaction. (steel company, mining corporations) - Products can be inventoried for later consumption. - Quality is directly measured. - Human element may be less important.

Organizational culture exists in two different ways:

1. Observable behavior and visible artifacts: such as symbols, ceremonies, stories, behaviors, physical settings... Things we can actually see. 2. Underlying values, assumptions, beliefs and thought processes, that are more deeply ingrained aspects of the culture

Basic parts of an organization:

Top management Middle management Technical & Administrative support Technical core

2 different essential ways that the environment influences organizations:

(1) the need for information about the environment. (2) the need for resources from the environment.

When cultures are shaped by managers they usually perform two functions:

(1) to integrate members, and to create a collective identity. (2) guide employees in decision-making in the absence of written rules or policies.

Definition of an organization:

- A social entity → people in interaction. - Goal-directed → many different goals and interpretations of them. - Deliberately structured and coordinated → there is planning and design going on. Someone is doing something actively. Who? Why? What outcomes and success? - Linked to the external environment → nothing exists in a vacuum, and the links make the boundaries fuzzy

Service technologies:

- Intangible output - Direct client involvement in the production process. (ex. doktor, föreläsare). - Human element very important - Labor and knowledge intensive - Production and consumption takes place simultaneously.

Environment in two categories:

- Task environment: Sectors where the organization interacts directly, and where the sector has a direct impact on the organization's ability to achieve its goals. This includes for the industry, raw materials, market sectors, HR and international sectors. - General environment: Sectors that have an indirect impact on the organization. This includes the government, sociocultural, economic conditions, technology and financial resources.

4 different cultures

1. Adaptability culture → external focus and a requirement for flexibility. The culture encourages entrepreneurial values, innovation and change. If you don't adapt quickly, the company will fail. Business models are more and more adapting to this culture with more and more flexibility. 2. Mission culture → external focus with stability. Clear vision of the organization's purpose and achievement of goals. Usually results in a high level of competitiveness and profit-making. 3. Clan culture → internal focus and need for flexibility. This culture focuses on the needs of employees, and taking care of them to make sure that they are satisfied and productive. 4. Bureaucratic culture → internal focus and stability. This culture is methodical with consistency, conformity and collaboration among members.

Model of decline stage

1. Blinded stage → leaders will miss signs of decline. Needs more effective scanning and support for devil's advocates. 2. Inaction stage → leaders deny the decline. Leaders need to acknowledge and take action to realign the organization with the environment. 3. Faulty action stage → leaders are forced by severe circumstances to consider major changes, for example downsizing. 4. Crisis stage → there is organization chaos, and more extreme measures have to be made. 5. Dissolution stage → the stage of decline is now irreversible, and the only option is to close down.

Organizations are credited with a lot of things, such as:

1. Bringing together resources to achieve goals and outcomes. 2. Producing goods and services. 3. Facilitating innovation. 4. Harnessing modern manufacturing, service and information technologies. 5. Adapting to and influencing a changing environment. 6. Creating value. 7. Accommodating ongoing challenges of diversity, ethics and the motivation and coordination of employees.

Managers have five sources of personal power:

1. Legitimate power → authority granted by the person's formal management position. 2. Reward power → the ability to give rewards to other people. 3. Coercive power → the ability to punish other people. 4. Expert power → derives from a person's greater skill or knowledge about a task being performed. 5. Referent power → derived from personal characteristics. People admire the manager and want to be like them.

2 different strategies on how to adapt to the environment:

1. Classic approach → as the complexity and uncertainty rises in the external environment, the organization increases their positions and departments (their internal complexity). For example the legal department, the HR department, finance group... This is called buffering. The different departments buffer things off the technical core (those who actually produce the product), which makes it static and somewhat defensive and short sighted. 2. Boundary-spanning roles → concerns the exchange of information, both within the organization and from the organization out to the environment. Boundary personnel keep direct touch with and scan the environment, or we use business intelligence competitive intelligence (which is high tech analysis of internal and external data, both in their own company and with their rivals).

Three ways to help smooth things out if downsizing is necessary is:

1. Communicate more, not less. 2. Provide assistance to displaced employees. 3. Help the survivors thrive.

Flexible manufacturing systems

1. Computer aided design: computers assist in drafting, designing and engineering) 2. Computer aided manufacturing: Computer-controlled machines that increase the speed that items can be manufactured. 3. Integrated information network: A computerized system that links all aspects of the firm.

Departments that are rated as powerful contains one or more of these characteristics (five power sources):

1. Dependency → power is derived from having something someone else wants. If department A depends on department B, department B will have more power. The number and strength of these dependencies are important. 2. Financial resources → departments with more resources have more power. Money generates dependency and can be converted to other types of resources.3. 3. Centrality → a department's role in the primary activity of an organization. How much does the department affect the final output of the organization? The more influence and centrality over the primary action in the company, the more power. 4. Non-substitutability → a department has more power if the department's function cannot be performed by other readily available resources, or if one employee can't be easily replaced. 5. Coping with uncertainty → departments that reduce uncertainty in the environment have more power.

Porter's competitive strategies

1. Differentiation - the goal is to differentiate the product from the competitors'. It can be costly, but is efficient at reducing rivalry with competitors. 2. Low cost - the goal is to provide a lower cost compared to competitors. 3. Focus - focusing on a specific market or buyer group. After deciding this, you choose either differentiation or low cost.

Organizational life cycle

1. Entrepreneurial stage → when an organization is first born. Focus is on creating a product, founders are very devoted and they have most of the control. After a while in this stage, proper leadership is needed. This can be done by the entrepreneurs adjusting the design of the organization to accommodate continued growth, or bring in outside managers that can do so. 2. Collectivity stage → the organization develops clearer goals and direction. Departments, hierarchy and job assignments are established. After a while in this stage, the need for delegation rises. We want to find mechanisms to control and coordinate departments without reliance upon detailed supervision from the top. 3. Formalization stage → the organization installs rules, procedures and control systems. Communication is more formal and less frequent, while managers work on strategy. Decentralized units such as product groups may form to improve coordination. After a while in this stage, the amount of formalization might be limiting innovation and other initiatives. There is simply too much red tape! 4. Elaboration stage → a new type of collaboration and teamwork emerges, where formal systems may be simplified to instead have more teams that operate across functions. Managers are therefore urged to develop skills for working together as well. The organization can also be split into multiple divisions to maintain a small-company philosophy. However, after a while, the organization will lose momentum and enter a period of decline. At this point, there needs to be a revitalization. Encouraging innovation and replacing top managers is common. Either the company succeeds, or declines.

Consequences of triumph of emptiness

1. Increased quantity leads to decreased quality → the more we have of something, the bigger the tendency to have worse quality per unit. For example, material well being has increased, but general well being has not. The more nice brands spread, the less is their qualitative worth. 2. Erosion of trust → investments in a better image leads to loss of substance quality. For example, all the resources put into universities, but with worse students and loss of status for the university leads to weakened professor titles. 3. Narcissism → for example grandiosity and illusion projects encourage narcissism, they are hollow and just play on the person's identity 4. Functional stupidity → you don't reflect over what you think, the consequences of your actions or question why you actually do something. It gives a sense of security as you just keep with the flow and not question things.

Organizing strategies for controlling the external environment:

1. Establishing interorganizational linkages → creating beneficial relationships between organizations or other parts of the environment. a. Ownership → companies buy a part of, or a controlling interest in, another company. This gives access to different technology, products and other resources. b. Formal strategic alliances → contracts (legal and binding relationship with another firm) or joint ventures (creates a new organization that is somewhat independent from parent organizations). c. Cooptation, interlocking directorates → (1) when leaders from sectors in the environment are made part of the organization, for example an influential customer, and (2) when a member of the board of one company sits on the board for another company. d. Executive recruitment → transferring or exchanging executives. e. Advertising and public relations → influencing the taste of consumers by advertisement or having people speak well of the organization 2. Controlling the environmental domain → trying to change the environment. a. Change of domain → just changing the domain all together. Seeking new relationships, finding a domain with less competition... b. Political activity/regulation → influencing government legislation and regulations. c. Trade associations → joining other organizations, working together to influence. d. Illegitimate activities → behaviors not considered legitimate. Last resort!

Vertical sources of power

1. Formal position → top positions give certain rights, responsibilities and prerogatives that give the managers power. The amount of power managers, middle managers and staff have is usually built into the organization's structural design. If the work requires staff to be creative and independent, they have more power. 2. Resources → organizations allocate huge amounts of resources. Managers allocating and determining the distribution of these resources gives them a lot of power. Resources also create a dependency relationship. 3. Control of decision premises and information → top managers place constraints on decisions made at lower levels by for example specifying a frame of reference and guidelines for decision-making. Top managers can also control information distribution, which can influence what and how decisions are made. 4. Network centrality → being centrally located in the organization and having access to information and people that are critical to the company's success. Top executives are more successful if they are located in the center of the organization, and those who are connected to jobs of current areas of concern have more power. 5. People → top leaders often increase their power by surrounding themselves with a group of loyal executives, and those at lower levels also have greater power if they have positive relationships with higher-ups.

Typically, bureaucratic characteristics tend to increase with large size. Specific ways that large organizations differ from smaller organizations is...

1. Formalization refers to rules, procedures and written down documents. These increase with organization size, since executives need to rely on rules to be able to control a large number of employees and departments. 2. Centralization is the level of hierarchy with authority to make decisions. Contrary to what you might think, centralization usually decreases with larger organizations. This is because senior managers would be completely overwhelmed if every decision was up to them, and decentralizing to different subgroups makes more sense. 3. Personnel ratios are ratios regarding the employees in an organization. Two that are mentioned are the administrative ratio (ratio of top administration to total employees) and the professional support staff ratio (how many professional staff members to total employees).

What is the current challenges for organizations?

1. Globalization (technology) 2. Ethics and social responsibility 3. Responsiveness (quickly respond to environmental changes) 4. The digital workplace 5. Diversity (embracing diversity, more women and ethnic minorities)

How to measure effectiveness

1. Goal approach → measures progress towards achieving output goals. Will usually use the operative goals, as they are usually more concrete. This is a popular way of measuring effectiveness, but it can be difficult since there are many and conflicting goals in an organization. 2. Resource-based approach → measures effectiveness through monitoring input side of organization (resources). You can look at different things, such as the organization's way of interpreting the external environment, bargaining positions (obtaining resources), the ability to use tangible and intangible resources as well as the ability to appropriately change according to the environment. This is very effective to use when other performance indicators are difficult to obtain. 3. Internal process approach → effectiveness is measured by internal organizational health and efficiency. There are seven indicators of an effective organization from this perspective: culture, loyalty, trust, decision making near sources of information, undistorted horizontal and vertical communication, rewards for performance and interaction between every part of the organization. The external environment is not evaluated, and the evaluation is a little bit difficult to assess as everything is very subjective.

Sources of intergroup conflict:

1. Goal incompatibility → each department has their own goals that members are trying to achieve, and the goals within departments can interfere with each other. 2. Differentiation → differences in values, attitudes and behaviors between departments can result in conflicts. If there also is a lack of trust, differences and conflicts will magnify. 3. Task interdependence → if the departments are dependent on each other, the potential for conflict increases. 4. Limited resources → groups are sharing limited money, physical facilities, HR and staff. Every group wants to increase their own resources, because this gives more power and influence

Three issues for concern regarding decision-making today:

1. High velocity environment → slow decisions are as inefficient as the wrong decisions. Therefore, track information in real time, build multiple alternatives, seek advice from everyone and involve everyone. 2. Decision mistakes and learning → failure provides insight and teaches us something new. Encourage experimentation and failure. This is how we learn. 3. Escalating commitment → learn to let go of decisions if they are not working. Don't block our negative information, or think that consistency is the best, but admit when you're wrong and adopt a new curse of action.

How organizations can overcome problems regarding bureaucracy.

1. Incident command system (ICS): Provides a mix between high formalization and hierarchical structure during stability and flexibility and responsiveness in times of crisis, where people for example can work over departmental and hierarchical lines to figure things out. 2. Increasing the professionalism of employees: This can compensate for the rules while still maintaining the ability for the employees to be creative. If they are highly educated and experienced, rules aren't as necessary.

The integrated effectiveness model:

1. Open system emphasis: Primary goals are growth and resource acquisition. 2. Rational goal emphasis: Primary goals are productivity and efficiency. 3. Internal process emphasis: Primary goals are a stable organizational setting that maintains itself in an orderly way. 4. Human relationships emphasis: Primary goal is to develop human resources. Has cohesion, morale, and training as subgoals.

Three factors that cause organizational decline is:

1. Organizational atrophy: when organizations grow older, just stick to what they've always done and can't adapt. 2. Vulnerability: when the organization can't prosper in its environment, for example because of shifts in consumer tastes. 3. Environmental decline or competition: reduced energy and resources available to support an organization, for example by new competition.

Sources of ethical values in organizations

1. Personal ethics → personal values translate into behavior, which is an important aspect of ethical decision-making. This can be affected by what type of ethical framework people use. For example utilitarianism (greatest benefit for the largest number of people), personal liberty (greatest freedom for individuals) or distributive justice (promotes equity). 2. Organizational culture → values, attitudes and behavior patterns of a wider organizational culture. Organizational culture can exert a powerful impact on personal ethics because it helps guide employees in making daily decisions. 3. Organizational systems → formal ethics programmes in organizations. 4. External stakeholders → managerial ethics are impacted by a variety of external stakeholders and their opinions on things.

Organizational decision-making:

1. Problem identification stage . 2. Problem solution stage.

Miles and Snow's strategy typology

1. Prospector - this strategy fits a dynamic and growing environment, as it promotes innovation, risk taking, seeking out new opportunities and growing. 2. Defender - this strategy fits a declining industry or a stable environment. The defender will work with stability, internal efficiency and control. 3. Analyzer - a mix between the first two. They will maintain a stable business while also innovating on the periphery. They will try to find a balance. 4. Reactor - not really a strategy, as reactors respond to changes ad hoc (temporary solution). No long range plan is defined.

Individual decision-making (2 ways):

1. Rational approach (how managers should try to make decisions) Based on systematic analysis of a problem, followed by choice and implementation in a logical, step-by-step order. According to the rational approach,decision-making can be broken down into eight steps (first four problem identification, last four problem solution): a. Monitor the decision environment → monitor internal and external information that indicates a deviation from planned or acceptable behavior b. Define the decision problem → identifying essential details of the problem, such as where, when and who is involved and affected. c. Specify decision objectives → what performance outcomes should be achieved by our decision? d. Diagnose the problem → analyze the cause of the problem. e. Develop alternative solutions → figure out various options available to achieve desired objectives. f. Evaluate alternatives → assess the merits of each alternative, based on statistics or personal experience. g. Choose the best alternative. h. Implement the chosen alternative → give directions to ensure division is carried out Bounded rationality perspective ( how decisions actually have to be made due to severe time and resource constraints). a. Rationality is limited by the complexity of many problems. There is limited time, limited information, limited resources and so on. b. There can be constraints in the organization, where parts can disagree with each other, decisions can be affected by corporate culture and much more. c. You can personally have constraints that make you unable to be rational. Your own desire for prestige, your personal decision style, insecurities and more.

Definition of organization structure:

1. Represent formal reporting relationships, the number of levels in the hierarchy and the span of control of managers. 2. Identifies the grouping together of individuals into departments and of departments into the total organization. 3. The design of systems to ensure effective communication, coordination and integration.

Some of the most typical and important of the observable aspects of culture are:

1. Rites and ceremonies → elaborate and planned activities that are special events, usually for an audience. Four types of rites that appear in organizations are (1) rites of passage,(2) rites of enhancement, (3) rites of renewal and (4) rites of integration. 2. Stories → narratives based on events that are frequently shared among employees. Will talk about for example company heroes, can be legends or myths. 3. Symbols → something that represents something else. It can cause focus to be put on a specific item. 4. Language → sayings, slogans, metaphors, mottos or other forms of language to convey special meaning to employees. It's usually important for organizations to remain true to the slogan.

Bureaucracy

1. Rules and procedures enabled organizational activities to be performed as a routine. 2. Specialization and division of labor gives every employee a clear task to perform. 3. Hierarchy of authority provides supervision and control. 4. Technically qualified personnel is the basis for why people are hired, and not because of favoritism or friendship. 5. Separate position from position holder, which makes it so individuals do not own or have any inherent right to the job. 6. Written communications and records provided and organizational memory and continuity over time.

Technical complexity scale:

1. Small-batch and unit production → manufacture and assemble small orders to meet specific requirements. Relies heavily on the human operator. For example crafts,individual design and hand-made products. 2. Large-batch and mass production → long production runs of standardized parts, where the customers have no special needs. For example assembly lines, mass production... 3. Continuous-process production → the entire process is mechanized! For example chemical plants, pharmaceuticals and nuclear power plants

Authority:

A force for achieving desired outcomes, but only regulated by the formal hierarchy and reporting relationships. Authority comes from (high) organizational position, is accepted by subordinates, and flows down the vertical hierarchy.

Organizational environment:

All the elements that exist outside the boundary of the organization, and have the potential to affect all or part of the organization.

Power:

Can be exercised upward, downward and horizontally. Power comes from formal position, resources, information and network.

Social capital:

Concept regarding the influence of norms and values on how people work together and how they treat each other. Organizations with a high degree of social capital, relationships are based on trust and shared values. Organizations can build social capital by being open, honest and positive towards employees and outsiders.

Garbage Can Model

Deals with the flow of multiple decisions, unlike the other models who focus on single decisions. Applicable when there is extremely high uncertainty (organized anarchy) and the organization is organic (no vertical hierarchy and no bureaucratic). The highly uncertain conditions cause an organized anarchy, where problems, solutions and employees are lacking. Unique characteristics is that the decision process is not seen as a sequence of steps that begins with a problem and ends with a solution. (An idea may be proposed as a solution when no problem is specified. A problem may exist and never generate a solution). Streams of events with the outcome as decisions. The events are (1) problems,(2) solutions, (3) participants (employees) and (4) choice opportunities (when organizations make a decision). Consequences of garbage can decision process: Solutions may be proposed even when solutions do not exist. Choices are made without solving problems. Problems may persist without being solved. A few problems are solved.

Large organizations:

Economies of scale, global reach, vertical hierarchy, mechanistic, complex, stable market.

Traditional to learning organizations

Learning organizations differ from "regular" organizations in particularly five ways: 1. Horizontal structure instead of vertical, so everyone can make decisions. 2. Empowered roles instead of routine tasks, where the employees have more responsibility and ability to adjust their roles according to what's needed. 3. Shared information instead of formal control, where information is shared and communication is optimized to optimize performance. 4. Collaborative instead of competitive, where employees contribute to strategy development (since they have contact with customers, products...)! 5. Adaptive instead of rigid, since the environment is always changing, the company also has to be able to change rapidly. There is more openness, equality, improvement and change.

External environment is greatly linked to the internal management structure. We here make distinctions between two different types of organizations:

MECHANISTIC Common when the environment is stable. Centralized, vertical, formalized. 1. Tasks are broken down into specialized, separate tasks 2. Tasks are rigidly defined 3. There is a strict hierarchy of authority and control, and there are many rules 4. Knowledge and control of tasks are centralized at the top of the organization 5. Communication is vertical ​​ORGANIC 1. Employees contribute to the common tasks of the department 2. Tasks are adjusted and redefined through employee teamwork 3. There is less hierarchy of authority and control, and there are few rules 4. Knowledge and control of tasks are located anywhere in the organization 5. Communication is horizontal.

Organizational decision-making processes:

Management Science Approach, Carnegie Model, Incremental decision-making The learning organization: Combining the incremental process and Carnegie model, Garbage Can Model

Management Science Approach

Management science is an excellent approach for decision-making when the problems are analyzable and the variables can be defined and measured. The mathematical models can contain thousands of variables, each one relevant in some way to the ultimate outcome. It can accurately and quickly solve problems that have too many explicit variables for human processing.

Intuitive Decision-making:

Managers use their experience and judgment to make decisions. Managers who have experience will develop a gut feeling, because they learn to perceive and understand problems. Intuitive processes can be used in both identifying a problem and solving the problem.

Carnegie Model

Organizational-level decisions involve many managers and the final choice is based on coalition among them. Coalition = alliance among several managers. Management coalition needs for two reasons. 1. Organizational goals are often ambiguous and inconsistent, and managers often need to bargain about problems and build coalitions. 2. Individual managers tend to be rational but function with human cognitive limitations and other constraints. Alltså managers do not have the time and mental capacity to identify all dimensions and to process all relevant information relevant to a decision.

Closed systems:

Organizations are conceived as self-contained and effectively sealed off from the outside world. Little focus on the dependence on the environment.

Incremental decision-making

Places less weight on the political and social factors described in the Carnegie model, and tells more about the structure sequence of activities undertaken from the discovery of a problem to its solution. Decision stages: Identification phase (be aware of the problem and diagnosis) -> Development phase (solution is shaped) -> Selection phase (solution is chosen).

Open systems:

Places the organization in its context, where it is affected by the environment around it.

Workflow interdependence among departments

Pooled → basic form. Departments work independently. Shared financial resources and contribution of each department contributes to overall performance. Such as a bank. There is low communication, standardization, rules, procedures and usually a divisional structure. Sequential → one department depends on the performance of the preceding department.This requires the use of horizontal mechanisms such as integrators or task forces. An Example is an assembly line. Mutual → there is a two-way flow. The output of A is the input of B, and the output of B is the input back in A. Here, a horizontal structure is needed and lots of communication. One example is a hospital.

Small organizations:

Responsive, flexible, regional reach, flat structure, organic, simple, niche finding.

Departmental technologies

Routine technologies: Little task variety. The tasks are formalized and standardized. Mechanistic structure. Non-routine technology: High task variety. The conversion process is not analyzable or well understood. Organic structure. Craft technology: Fairly stable steam of activities but the conversion stage is not analyzable or well understood. Engineering technology: Tasks are complex and varied, but performed in accordance with established routines and formulas.

Horizontal organization structure is dominant:

Shared tasks Relaxed hierarchy, few rules Horizontal communication, face to face Many teams and task forces Decentralized decision-making

Organization structures:

Simple structure, Functional structure, Divisional structure, Multifocused (matrix) structure, Horizontal structure, Virtual network structure.

Vertical organization structure is dominant:

Specialized tasks Strict hierarchy, many rules Vertical communication and report systems Few teams, task forces Centralized decision-making

Efficiency:

The amount of resources used to achieve the organization's goals

Organization's domain:

The chosen environmental field of action, in other words its niche.

Organizational design can be categorized in two types of dimensions.

Structural dimensions → key, internal characteristics of an organization. a. Formalization - reliance upon written documentation, such as procedures, policies and job descriptions. b. Specialization - the degree to which an organizational task is subdivided into separate jobs. How narrow are an employee's tasks? c. Hierarchy of authority - who reports to whom, and what is the span of control for each manager? d. Centralization - the hierarchical level that has authority to make a decision (decentralized if decisions are made lower in the organizational level). e. Professionalism - the level of formal education and training of employees. f. Personnel ratios - the deployment of people to various functions and departments (such as administrative, professional staff...) Contextual dimensions → characterize both the organization as a whole as well as a broader organizational setting. a. Size - the size of the organization as a whole or specific components. b. Organizational technology - how the organization actually produces the products (tools, techniques and actions). c. Environment - all elements outside the boundary of the organization. d. Goals and strategy - define the purpose and competitive techniques that sets theorganization apart from others. Goals are often written down, and the strategy is the plan on how to reach the goal. e. Culture - underlying set of key values, beliefs, understandings and norms shared by employees.

Matrix structure

Structure - In this structure the product managers and functional managers have equal authority within the organization and employees report to both of them. - If it is a clothing manufacturer, product line A is footwear, product line B is clothes and product line 3 is nightclothes. - - - - Each product line serves a different market and customers. - Departments like design, manufacturing and marketing are working with all the product lines (designers are shared across product lines). This allows employees to develop in-depth expertise to serve all product lines efficiently. - Medium sized organization. - Because of the misunderstanding for employees that can occur, 2 variations have evolved: the functional matrix and the product matrix. In a functional matrix the functional bosses have primary authority and the product managers simply coordinate product activity. Example: A clothing manufacturer company Strengths: - Achieves coordination necessary to meet dual demands from customers. - Flexible sharing of human resources across products. - Suited for complex decisions and frequent changes in an unstable environment. - Provides opportunity for both functional and product skill development. - Best in medium-sized organizations with multiple products. Weaknesses: - Causes participants to experience dual authority, which can be frustrating and confusing. - Means participants need good interpersonal skills and extensive training. - It is time consuming; involves frequent meetings and conflict resolution sessions. - Will not work unless the participants understand it and adopt collegial rather than vertical type relationships. - Requires great effort to maintain power balance.

Functional organization structure

Structure: - In a functional structure activities are grouped together by common function from the bottom to the top of the organization. All engineers are located in the engineering department, and the vice president of engineering is responsible for all engineering activities. The same goes for marketing, manufacturing and R&D. These groups are for the most part independent from each other. - All human knowledge and skills with respect to specific activities are merged providing a valuable depth of knowledge for the organization. - Most effective when in-depth expertise is critical so meet organizational goals. Example: Apple uses a company structure that is commonly known as "functional organization". This means that the company has been organized around areas of expertise, rather than individual products. These groups, like engineers, marketers, manufacturers are for the most part independent from each other. Strengths: - Allows economies of scale within functional departments. - Enables in-depth knowledge and skill development. - Enables organization to accomplish functional goals. - Is best with only a few products Weaknesses - Slow responsive time to environmental changes. - May cause decisions to pile on top, hierarchy overload. - Leads to poor horizontal coordination among departments - Results in less innovation. - Involves restricted view of organizational goals.

Divisional structure

Structure: If the functional structure is redesign into separate product groups and each group contains functional departments, it becomes a divisional structure. Divisions can be organized according to individual products, services, groups. The unique feature is that grouping is based on organizational outputs. This structure decentralizes decision-making. Example: Microsoft uses a divisional structure to develop and market its different products. With the different divisions, Microsoft is flexible to the fast-changing environment. Each product line belongs to a specific division so it becomes easier for the customer to reach the right division for support. Strengths: - Suited to fast change in an unstable environment. - Leads to customer satisfaction because product responsibility and contacts are clear. - Involves high coordination across functions. - Allows units to adapt to differences in products, regions and customers. - Bets in large organizations with several products. - Decentralized decision-making. Weaknesses - Eliminates economies of scale in functional departments. - Leads to poor coordination across product lines. - Eliminates in-depth competence and technical specialization. - Makes integration and standardization across product lines difficult.

Horizontal structure

Structure: Organizes employees around core processes. They have complete responsibility for their core, perform as teams and can think creatively. Many companies redesign their vertical organization along its horizontal workflows and processes (re-engineering). This makes it easier for employees to access one another and coordinate their efforts. The culture is one of openness, trust and collaboration and focus on continuous improvement. Example: Local government in the UK. It provides the citicents with a range of services. In the past it was difficult for the customers to reach specific departments to make a complaint. When the organization studied their structure they saw the problem and re-engineered the company. They built a centralized contact center who had access to every department and it became much easier for customers. Strengths: - Promotes flexibility and rapid response to change in customer needs. - Each employee has a broader view of organizational goals. - Promotes a focus on teams and collaborations. - Improves quality of life for employees by offering them the opportunity to share responsibility and decision-making. Weaknesses: - Determining core processes is difficult and time consuming. - Requires changes in culture, job design and reward systems. - Traditional managers usually don't want to give up power and authority. - Can limit in-depth skill development.

Effectiveness:

The degree to which an organization achieves its goals

Simple organization structure

Structure: Usually the first type of structure new organizations use. There is no formal hierarchy, no chain of command. Each employee does many tasks and has close contact with customers. Example: A newly started company with few employees. Example Martin Professional that first produces fog machines in his basement. Strengths: - Flexibility and quick response to changes in customer demand. - Enables employees to focus on product development. - High employee commitment and loyalty. - Strong clan and adaptive culture - Good for small companies Weaknesses: - Hard to know which employee do what - Limited use of cross-abilities and development - Eliminates economics of scale among employees - Big product portfolio - Sometimes difficult to coordinate across different employees and customers.

Virtual network structure

Structure: Views as a central hub surrounded by a network of outside specialists. Services such as accounting and marketing are outsourced to separate companies. Example: Consider an online retail company that has its software engineers in India, marketing team in the UK, and customer support spread globally. Work is coordinated through digital platforms, with meetings or discussions conducted virtually. This is a simplistic example of a virtual organizational structure. Wordpress, is a prime example of a successful Virtual Organizational Structure. The company has over 1200 employees, all of whom work remotely from over 70 countries. The company doesn't have a central office; instead, it utilizes a host of online tools for project management, collaboration, and communication. Strengths: - Enables even small organizations to obtain talent and resources worldwide. - Gives a company immediate scale and reach without huge investments in factories and equipment. - Enables the organization to be highly flexible and responsive to changing needs. - Reduces administrative overhead costs. Weaknesses: - Managers do not have hands-on control over many activities and employees. - Requires time to manage relationships and potential conflicts with contact partners. - Risk of organizational failure if a partner fails to deliver. - Employee loyalty and culture can be weak because employees feel they can be replaced by contract services.

Managers can use various tactics regarding increasing their power, political tactics to achieve desired outcomes and tactics for increasing collaboration.

Tactics for increasing power: 1. Enter areas of high uncertainty → departmental power comes from coping with uncertainties. Entering these areas will therefore give you the possibility to increase your power. 2. Create dependencies → since dependencies are a source of power, creating more of them will give you more power. 3. Provide scarce resources → resources are an important organizational tool, and having them gives more power 4. Satisfy strategic contingencies → as mentioned, those who solve strategic contingencies have more power. Political tactics for using power: 1. Build coalitions and expand networks → talk with other managers and persuade them of your point of view. Can also build horizontal networks. Most important decisions are made outside of meetings! 2. Assign loyal people to key positions → having loyal people around you helps you easily achieve departmental goals 3. Control decision premises → choose or limit information provided to other managers or in other ways constrain boundaries of a decision to have control over what happens. 4. Enhance legitimacy and expertise → managers exert influence where they have expertise. 5. Make a direct appeal → make goals and needs explicit so the organization can respond. Tactics for enhancing collaboration 1. Create integration devices → teams or project managers who span the boundaries between departments can be used as integration devices. Joint problem-solving enhances collaboration and makes the people understand each other. 2. Use confrontation and negotiation → confrontation (parties in conflict directly engage and try to work out their differences) and negotiation (bargaining process that usually occurs during confrontation). Used when conflicts do occur. More successful with win-win rather than win-lose. Also possible with

Difference between flexible manufacturing and traditional mass production

The new choices, rather than the more traditional ones, results in abilities to have bigger batch sizes with still high product flexibility.

Core technology:

The work processes directly related to the organization's mission.

values-based leadership

This is when leaders strive to influence cultural and ethical values by articulating a vision for organizational values, communicating them and then institutionalizing the vision through everyday vision.

Vertical information linkages

Vertical links are used to coordinate activities between the top and the bottom. a. Hierarchical referral - chain of command. Problems can be referred to the next level in the hierarchy. b. Rules and plans - rules can be established so employees know how to respond without communicating directly with their manager. c. Vertical information systems - reports or other written information that simplifies the communication up and down the hierarchy

Non-core technology:

Work processes that are important but not directly related to the organization's mission.

Combining the incremental process and Carnegie model

a coalition is used while identifying the problem, or the use of trial-and-error is applied to design a solution to the problem. This is used when either problem identification problem solution is uncertain.

Horizontal information linkages

a. Information systems - systems that simplify communication between departments, as well as improves relationships between them. b. Direct contact - between departments through a liaison person, whose job is to communicate and achieve coordination with other departments. c. Task forces - when something involves more than two departments. Each member of the task force represents the interests of a department and can carry information back. d. Full-time integrator - someone with a full time position with the sole purpose of coordination between departments. e. Teams - project teams where they work together on big projects, new product lines etc.

Rational model

rational decision making is appropriate when goals are in alignment, there is little differentiation, departments have pooled interdependence and resources seem abundant. Behavior is not random or accidental, and every decision is made in a logical way.