670-1
Refer to Organizational Insight 1.4, "First Global Xpress Delivers Packages Faster, Cheaper, and Greener," in the text. Why does FGX claim that it provides a "greener" way to transport shipments?
FGX ships its customers' packages directly, eliminating the flight to the hub which is common with other shipping companies. Thus, it uses less fuel oil with a 30% savings in CO2 emissions, providing customers with this service "in a more socially responsible, greener way."
Refer to Organizational Insight 1.3, "How Diverse Manufacturing Managers Can Help Increase Product Quality," in the text. How has hiring a growing number of women employees benefited Ford?
Hiring a growing number of women employees has changed the values and norms of Ford's manufacturing culture. Not only has it reduced the level of conflict between managers and workers, it has promoted cooperation and helped promote Ford's focus on increasing product quality, which is one of its major competitive advantages in the automotive manufacturing market today.
Refer to Organizational Insight 1.1, "How Steve Jobs Learned How to Organize and Control Apple," in the text. What were the consequences of Jobs' managerial style which he employed initially at Apple?
Jobs' arbitrary and overbearing style of management led to fierce competition, misunderstanding, and growing distrust among workers. He often resorted to favoritism and his strained relationship with Sculley (CEO of Apple) led to Jobs losing control of the company.
Refer to Organizational Insight 1.1, "How Steve Jobs Learned How to Organize and Control Apple," in the text. What was the first step taken by Jobs when he returned to Apple in 1997?
Jobs' first step was to create a clear vision and goals to energize and motivate Apple employees. He did this by introducing new equipment, delegating work, setting challenging goals, and ensuring that time schedules for different projects were met.
What is organizational effectiveness? Discuss three approaches to evaluating effectiveness and the problems of each approach.
Organizational effectiveness is the ability to use resources to create value; it includes control, innovation, and efficiency. The external resource approach evaluates a company's ability to obtain scarce resources and valued skills. Indicators include stock prices, return on investment, and market share. These indices are compared to competitors' indices. However, this approach fails to consider organizational culture and structure. The internal approach reviews the organization's ability to innovate and respond to the environment quickly. Some measures include the length of time to get a product to market, decision-making speed, and coordination time. This approach does not consider costs or the external environment. The technical approach reviews an organization's ability to use skills and resources efficiently. This approach considers neither the environment nor structure and culture. It is important to evaluate an organization in all three areas - control, innovation, and efficiency.
What is the relationship among organizational theory, design, change, and organizational structure and culture?
Organizational theory is the study of how organizations function and how they affect and are affected by the environment in which they operate. Organizational theory deals with the whole organization. Organizational design entails decisions about structure and culture. Organizational change is the process in which organizations move from their present state to some desired future state to increase effectiveness. Organizational structure is the formal set of task and authority relationships. Organizational culture is a set of shared values that influence behavior.
Draw up a list of effectiveness goals that you would use to measure the performance of (a) a fast-food restaurant and (b) a school of business.
A fast-food restaurant's goals will differ from a business school's goals because a school is a nonprofit organization. (a) Some goals used to measure effectiveness at a fast-food restaurant are as follows: Lower the cost of meat, fries, and drinks. Lower the cost of labor. Improve the quality of the food and the skills of employees. Increase profits, stock price, and market share. Satisfy government requirements on sanitation and fair labor laws. Reduce employee conflict. Speed up the time it takes a customer to get served. Find more efficient ways to produce the food. Increase employee motivation by offering bonuses. Increase the quality of the food by ensuring that it is not too greasy and that it is hot when customers receive it. Minimize the number of wrong orders. (b) A business school's goals can include the following: Attract top-quality faculty and students. Maximize revenue from tuition and fees. Offer scholarships. Attract revenue from organizations and alumni. Gain the support of the local community. Reduce conflict. Ensure that students are prepared for jobs. Respond to changes in the environment by constantly updating the curriculum. Encourage coordination among faculty from different departments.
Refer to Organizational Insight 1.2, "Groupon Forges Ahead," in the text. Groupon developed a strategy that aimed at leveraging its members' collective buying power to obtain deals from companies supplying goods and services that were hard to resist. This enabled Groupon to capture customers and retain its competitive advantage. Why does Mason believe that investing in sales and marketing for Groupon is worthy?
Any new startup can easily imitate Groupon's strategy, but being the first mover is a major advantage. Mason believes that pouring money into sales and marketing to make Groupon the global leader is worth the effort as it would enable them to reap the benefits of their innovative strategies. Groupon gives individuals the bargaining power they need to deal with large companies. It also looks at protecting its users by promising a refund if consumers are dissatisfied.
How do managers measure organizational effectiveness?
Because managers are responsible for utilizing organizational resources in a way that maximizes an organization's ability to create value, it is important to understand how they evaluate organizational performance. Control, innovation, and efficiency are the three most important processes managers use to evaluate how effectively the organization is creating value. Control means having control over the external environment and having the ability to attract resources and customers. Innovation means developing an organization's skills and capabilities so the organization can discover new products along with creating new organizational structures and cultures to adapt to change. Efficiency means developing modern production facilities using new information technologies that can produce and distribute a company's products in a timely and cost-effective manner.
Refer to Focus on New Information Technology, "Amazon.com, Part 1," in the text. The success story of Amazon.com depicts how Jeff Bezos recognized the immense entrepreneurial opportunity in the rapid growth of the Internet and used it optimally to become extremely successful in the new electronic virtual marketplace. What was the realization that prompted Jeff Bezos' entrepreneurial effort?
Bezos realized that compared to a real bricks-and-mortar bookstore, an online bookstore would be able to offer a much larger and more diverse selection of books. Additionally, a virtual bookstore would enable customers to browse, review, and access book recommendations. This prompted him to set up Amazon.com. The result of the conversion process is an output of finished goods and services that the organization releases to its environment, where they are purchased and used by customers to satisfy their needs. A value-creation model can be used to describe the activities of most kinds of organizations.
Why do organizations exist?
The production of goods and services most often takes place in an organizational setting because people working together to produce goods and services usually can create more value than people working separately. Organizations exist: To increase specialization and the division of labor - The collective nature of organizations allows individuals to focus on a narrow area of expertise, which allows them to become more skilled or specialized at what they do. To use large-scale technology - Economies of scale are cost savings that result when goods and services are produced in large volume on automated production lines. Economies of scope are cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across several different products or tasks. To manage the organizational environment - Organizations are complex structures involving many economic, social, and political pressures that affect their ability to function optimally. Managing complex environments like these is a task beyond the abilities of most individuals, but an organization has the resources to develop specialists to anticipate or attempt to influence the many pressures from the environment. To economize on transaction costs - The costs associated with negotiating, monitoring, and governing exchanges between people to solve the numerous transaction difficulties are called transaction costs. Organizations' ability to control the exchanges between people reduces the transaction costs associated with these exchanges. To exert power and control - To get a job done efficiently, people must come to work in a predictable fashion, behave in the interests of the organization, and accept the authority of the organization and its managers. All these requirements make production less costly and more efficient but put a burden on individuals who must conform to organizational goals.
Refer to Organizational Insight 1.4, "First Global Xpress Delivers Packages Faster, Cheaper, and Greener," in the text. This study demonstrates how First Global Xpress, a small $10 million global package shipping company, is competing with its much bigger competitors by improving its efficiency in the global package shipping business. This is an example of the technical approach to measuring organizational efficiency. What is the "hub-and-spoke" package distribution system?
Under the "hub-and-spoke" package distribution system, a package has to go through a central hub first, where packages from all over the country are sorted for shipment to their final destination. This means that a customer's shipment has to take two different flights - one to get to a hub and another to get to the destination.
How do organizations create value? What is the role of entrepreneurship in this process?
Value is created through three stages: input, conversion, and output. At the input stage, value depends on how an organization selects and obtains the inputs; certain inputs create more value than others. At the conversion stage, value is a function of employees' skills, including learning from and responding to the environment. Output creates value if it satisfies a need. Entrepreneurship is important to value creation by recognizing a need, gathering inputs, and transforming them into a product or service. The value creation cycle will continue if customers are satisfied; profits will generate inputs and improve the conversion process.
