MGMT final

Hierarchy culture

Emphasizes efficiency, process and cost control, organizational improvement, technical expertise, precision, problem solving, elimination of errors, logical, cautious and conservative, management and operational analysis, careful decision making

technological forces

Environmental influence on organizations where speed, price, service, and quality of products and services are dimensions of organizations' competitive advantage in this era.

complex-unstable environments

Environments that have a large number of external elements, and elements are dissimilar and where elements change frequently and unpredictably

complex-stable environments

Environments that have a large number of external elements, and elements are dissimilar and where elements remain the same or change slowly

simple-unstable environments

Environments that have a small number of external elements, and elements are similar and where elements change frequently and unpredictably.

simple-stable environments

Environments that have a small number of external elements, and elements are similar, and the elements remain the same or change slowly.

Natural disaster and human induced environmental problems

Events such as high-impact hurricanes, extreme temperatures and the rise in CO2 emissions as well as 'man-made' environmental disasters such as water and food crises; biodiversity loss and ecosystem collapse; large-scale involuntary migration are a force that affects organizations.

competitive environment

Factors and situations both inside the firm and outside the firm that have the potential to impact its operations and success.

primary activities

Firm activities on the value chain that are directly responsible for creating, selling, or servicing a product or service, such as manufacturing and marketing.

strategic positioning

Firm's decisions on how to organize its actions and operate to effectively serve customers and compete against rivals.

market culture

Focuses on delivering value, competing, delivering shareholder value, goal achievement, driving and delivering results, speedy decisions, hard driving through barriers, directive, commanding, competing and getting things done

legal factors

In PESTEL, the laws impacting business, such as those governing contracts and intellectual property rights and illegal activities, such as online piracy.

buyer power

In the relationship between a firm and its customers, buyers with high power can negotiate product price or features, while buyers with low power cannot.

socio-cultural environmental forces

Include different generations' values, beliefs, attitudes and habits, customs and traditions, habits and lifestyles.

barriers to entry

Industry factors (such as high start-up costs) that can prevent new firms from successfully launching new operations in that industry.

internal environment

Innermost layer of a firm's competitive environment, including members of the firm itself (such as employees and managers), investors in the firm, and the resources and capabilities of a firm.

new entrants

One of Porter's Five Forces, the threat of new entrants assesses the potential that a new firm will start operations in an industry.

supplier power

One of Porter's Five Forces; describes the balance of power in the relationship between firms in an industry and their suppliers.

substitutes

One of Porter's Five Forces; products or services outside a firm's industry that can satisfy the same customer needs as industry products or services can.

industry rivalry

One of Porter's Five Forces; refers to the intensity of competition between firms in an industry.

environmental factors

PESTEL category that examines a firm's external situation with respect to the natural environment, including pollution, natural resource availability and preservation, and alternative energy.

sociocultural factors

PESTEL category that identifies trends, facts, and changes in society's composition, tastes, and behaviors, including demographics.

technological factors

PESTEL category that includes factors such as the Internet, social media, automation, and other innovations that impact how businesses compete or how they manufacture, market, or sell their goods or services.

economic factors

PESTEL category that includes facts (such as unemployment rates, interest rates, and commodity prices) about the state of the local, national, or global economy.

political factors

PESTEL factor that identifies political activities in the macro environment that may be relevant to a firm's operations.

demographics

Part of PESTEL that includes facts about the income, education, age, and ethnic and racial composition of a population.

switching costs

Penalty, financial or otherwise, that a consumer bears when giving up the use of a product currently being used to select a competing product or service.

strategy

Process of planning and implementing actions that will lead to success in competition.

strengths

Resources and capabilities of a firm; what it is good at. e.g., employees, patents, cash, brand, unique capabilities

value chain

Sequence of activities that firms perform to turn inputs (parts or supplies) into outputs (goods or services).

SWOT

Strategic analysis tool used to examine a firm's situation by looking at its strengths, weaknesses, opportunities, and threats.

external environment

The aspects of the world at large and of a firm's industry that can impact its operations.

functional structure

The earliest and most used organizational designs

government and political environment forces

The global economy and changing political actions increase uncertainty for businesses, while creating opportunities for some industries and instability in others

micro environment

The middle layer of elements in a firm's external environment, primarily concerned with a firm's industry situation. e.g., customers, competitors, intermediaries, suppliers

macro environment

The outermost layer of elements in a firm's external environment that can impact a business but are generally beyond the firm's direct control, such as the economy and political activity.

domain

The purpose of the organization from which its strategies, organizational capabilities, resources, and management systems are mobilized to support the enterprise's purpose

environmental scanning

The systematic and intentional analysis of a firm's internal state and its external environment.

competition

Business actions a firm undertakes to attract customers to its products and away from competitors' products.

strategic group

Businesses offering similar products or services and following the same generic competitive strategy.

corporate structure

Defines how motivating employees' beliefs, behaviors, relationships, and ways they work creates a culture that is based on the values the organization believes in

Macro forces in the environment

Economic forces technological forces sociocultural forces natural disasters and human-induced problems government & political forces

organic organizational structures

organizations that tend to survive or even thrive in unstable, complex, changing environments with much uncertainty; less rigid, more horizontal organizations featuring flexibility, less rules, two-way communication The opposite of a functional organizational form that works best in unstable, complex changing environments.

geographic organizational structure

organized around location of customers (divisional)

internal dimensions of organizations

primarily encompassed in the notion of organizational culture. Organizational culture refers to shared beliefs, relationships, values, and way organizational members work together it's how an organization's culture affects and influences its strategy

external organizational environments

refers to an inclusive concept that involves all outside factors and influences that impact the operation of an organization

divisional structure properties

repeats functional business structure again and again and again this creates overlap and can be expensive, but allows flexibility for divisions to address the needs of their their customers

company industry fit categories

simple + stable=1; low uncertainty simple + stable=2; low to moderate uncertainty simple + unstable=3; high to moderate uncertainty complex + unstable=4

properties of functional business structure

simple, mechanistic, vertical, formal structure silos (lacks horizontal communication and control mechanisms)

strategic analysis

the process of researching and identifying "actionable insights" from the organization's internal and external environments

mechanistic organization properties (stable, low uncertainty environment)

top-down hierarchy narrow span of control specialized tasks formal rules vertical communication structured decision-making

mechanistic organizational structures

traditional operating model; Best suited for environments that range from stable and simple to low-moderate uncertainty and have a formal "pyramid' structure.

resources

Things a firm has, such as cash and skilled employees, that it can use to create products or services.

external factors

Things in the world or industry environments that may impact a firm's operations or success, such as the economy, government actions, or supplier power. Strategic decisions can be made in response to these things but normally cannot directly influence or change them.

support activities

Value chain activities that a firm performs to sustain itself; do not directly create a product or service but are necessary to support the firm's existence, such as accounting and human resources.

competitive advantage

When a firm successfully attracts more customers, earns more profit, or returns more value to its shareholders than rival firms do.

networked-team structure

a form of the horizontal organization

McKinsey 7-S model

a popular depiction of internal organizational dimensions

Which of the following is an element of sociocultural forces? a. ethics b. employment and wage rates c. taxation d. health, food, stress e. new production forces

a. ethics

Which of the following organizational structures are best suited for environments that range from stable and simple to low-moderate uncertainty? a. mechanistic b. network c. organic d. team-based e. virtual

a. mechanistic

divisional organizational structure

basically many functional departments grouped under divisions (markets, products, services, client bases)

Which of the following use teams to combine vertical with horizontal structures? a. functional structure b. divisional structure c. matrix structure d. virtual structure e. geographic structure

c. matrix structure

matrix organizational structure

combination of functional with team divisional/project structure; work designed more around teams

adhocracy culture

creates an environment of innovating, visioning the future, accepting of managing change, and risk taking, rule-breaking, experimentation, entrepreneurship, and uncertainty

According to the environment-industry-organization fit model, Cell 2 represents which of these environments? a. simple-stable environment b. simple-unstable environment c. complex-unstable environment d. complex-stable environment

d. complex-stable environment

virtual organizational structure properties

defined core business function flexible modular virtual teams formed around non-core business functions often heavily dependent on web information communication technologies (ICTs)

competing values framework

developed by Kim Cameron and Robert Quinn, this model is used for diagnosing an organization's cultural effectiveness and examining its fit with its environment adhocracy culture, clan culture, hierarchy culture, market culture

Which of the following profiles of an organization emphasizes creating, innovating, visioning the future, managing change, risk-taking, rule breaking, experimentation, entrepreneurship, and uncertainty? a. system culture b. clan culture c. market culture d. hierarchy culture e. adhocracy culture

e. adhocracy culture

eras in evolution of organizational structure

era 1: mid-1800s to late 1970s era 2: 1960s to 1980s era 3: mid-1990s to present

virtual organizational structure

flexible modular organization design that leverages dispersion, technology, and outsourcing around its core business structure

clan culture

focuses on relationships, team building, commitment, empowering human development, engaging, mentoring, and coaching

the organization's internal environment is comprised of

formal subsystem (leadership, strategy, management, goals, marketing, operations, technology, structure) informal subsystems (managers, culture, norms, relationships, politics, leadership)

six common organizational structures

functional divisional geographic matrix virtual team structure virtual structure In reality many organizations of any size use "hybrid structures"

stages of structures during eras 1, 2, and 3 in the evolution of organizational structure

functional structure divisional structure geographic structure matrix structure vertical team structure virtual structure

functional organizational structure

grouping people by separate functional specializations

2 critical purposes of organizational culture

helps an organization adapt to and integrate with its external environment by adopting the right values to respond to threats and opportunities fosters internal unity and enables the organization to achieve its purpose and common goals

Porter's Five Forces

industry rivalry supplier power threat of new entrants threat of substitutes buyer power

virtual team organizational structure

informal and flexible project/team structure that allows teams to form organically

organic organization properties (unstable, high uncertainty environment)

less rigid, horizontal organization flexible, few rules two-way communication participatory decision-making generalized shared tasks wide span of control

internal factors

organizational characteristics such as brand, core competencies, physical assets, market positioning, capitalization, and other factors related to what the organization is good at that may be leveraged for greater opportunities (aka competitive advantage)

open system model of organization properties

(environment) inputs (resources, raw materials, technologies, ideas, people, students, etc. taken from the environment) throughputs (organizational subsystems and processes transform inputs through education, manufacturing processes, etc.) outputs (results from the throughputs phase produce products, services, trained, certified, degreed professionals/people etc.)

PESTEL

*external macro factors political factors economic factors sociocultural factors technological factors environmental factors legal factors

complex + unstable=4

1. large number of external elements, and elements are dissimilar 2. elements change frequently and unpredictably examples: computer firms, aerospace, telecommunications, airlines

simple + stable=2; low to moderate uncertainty elements

1. large number of external elements, and elements are dissimilar 2. elements remain the same or change slowly e.g., universities, appliance manufacturers, chemical companies, insurance companies

simple + unstable=3; high to moderate uncertainty

1. small number of external elements and elements are similar 2. elements change frequently and unpredictably e.g., e-commerce, fashion clothing, music industry, toy manufacturers

simple + stable=1; low uncertainty elements

1. small number of external elements and elements are similar; 2. elements remain the same or change slowly e.g., soft drink bottlers, container manufacturers, food processors

horizontal organizational structures

A "flatter" organizational structure often found in matrix organizations where individuals relish the breath and development that their team offers

organizational structures

A broad term that covers both mechanistic and organic organizational structures.

capabilities

A firm's skill at coordinating and leveraging resources to create value.

focus (niche) strategy

A generic business-level competitive strategy that firms use in combination with either a cost-leadership or differentiation strategy in order to target a smaller demographic or geographic market with specialized products or services.

cost-leadership strategy

A generic business-level strategy in which a firm tightly controls costs throughout its value chain activities in order to offer customers low-priced goods and services at a profit.

differentiation strategy

A generic business-level strategy in which firms add value to their products and services in order to attract customers who are willing to pay a higher price.

industry

A group of firms all offering products or services in a single category, for example restaurants or athletic equipment.

virtual structure

A recent organizational structure that has emerged in the 1990's and early 2000's as a response to requiring more flexibility, solution based tasks on demand, less geographical constraints, and accessibility to dispersed expertise.

opportunity

A situation that a firm has the resources and capabilities to take advantage of.

geographic structure

An Organizational option aimed at moving from a mechanistic to more organic design to serve customers faster and with relevant products and services; as such, this structure is organized by locations of customers that a company serves

divisional structure

An organizational structure characterized by functional departments grouped under a division head

matrix structure

An organizational structure close in approach to organic systems that attempt to respond to environmental uncertainty, complexity, and instability

threat

Anything in the competitive environment that would make it harder for a firm to be successful. e.g., competitor actions, economic downturns, govt. reg's

generic business-level strategies

Basic methods of organizing firm value chain activities to compete in a product market that can be used by any sized firm in any industry.