Roth Ch. 11

organizational culture

The collectively shared values and norms of an organization's members; a key building block of organizational design.

span of control

The number of employees who directly report to a manager.

strategy implementation

The part of the strategic management process that concerns the organization, coordination, and integration of how work gets done. It is key to gaining and sustaining competitive advantage.

organizational design

The process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization.

socialization

a process whereby employees internalize an organization's values and norms through immersion in its day-to-day operations.

formalization

captures the extent to which employee behavior is steered by explicit and codified rules and procedures. Formalized structures are characterized by detailed written rules and policies of what to do in specific situations.

read lecture 14 slides

lots of charts

centralization

refers to the degree to which decision making is concentrated at the top of the organization. Centralized decision making often correlates with slow response time and reduced customer satisfaction.

exploration

searching for new knowledge that may enhance future performance.

core rigidity

A former core competency that turned into a liability because the firm has failed to hone, refine, and upgrade the competency as the environment changed.

organizational structure

A key building block of organizational design that determines how the work efforts of individuals and teams are orchestrated and how resources are distributed.

strategic control-and-reward systems

A key building block of organizational design; internal-governance mechanisms put in place to align the incentives of principals (shareholders) and agents (employees). They allow top management to specify goals, measure progress, and provide performance feedback

groupthink

A situation in which opinions coalesce around a leader without individuals critically evaluating and challenging that leader's opinions and assumptions.

hierarchy

An element of organizational structure that determines the formal, position-based reporting lines and thus stipulates who reports to whom.

founder imprinting

Firm founders set the initial strategy, structure, and culture of an organization by transforming their vision into reality.

input controls

Mechanisms in a strategic control-and-reward system that seek to define and direct employee behavior through a set of explicit, codified rules and standard operating procedures that are considered prior to the value-creating activities (budget-R&D projects, standard operating procedures-fast food).

output controls

Mechanisms in a strategic control-and-reward system that seek to guide employee behavior by defining expected results (outputs), but leave the means to those results open to individual employees, groups, or SBUs (ROWEs-results only work environments, carrot-and-stick approach).

mechanistic organization

Organizational form characterized by a high degree of specialization and formalization, and a tall hierarchy that relies on centralized decision making.

organic organization

Organizational form characterized by a low degree of specialization and formalization, a flat organizational structure, and decentralized decision making.

simple structure

Organizational structure in which the founders tend to make all the important strategic decisions as well as run the day-to-day operations.

matrix structure

Organizational structure that combines the functional structure with the M-form.

multidivisional structure (M-form)

Organizational structure that consists of several distinct strategic business units (SBUs), each with its own profit-and-loss (P&L) responsibility

functional structure

Organizational structure that groups employees into distinct functional areas based on domain expertise.

exploitation

applying current knowledge to enhance firm performance in the short term

norms

define appropriate employee attitudes and behaviors

values

define what is considered important

specialization

describes the degree to which a task is divided into separate jobs—that is, the division of labor. Larger firms, such as Fortune 100 companies, tend to have a high degree of specialization; smaller entrepreneurial ventures tend to have a low degree of specialization.

artifacts

elements such as the design and layout of physical space (e.g., cubicles or private offices); symbols (e.g., the type of clothing worn by employees); vocabulary; what stories are told, what events are celebrated and highlighted; and how they are celebrated (e.g., a formal dinner versus a company BBQ when the firm reaches its sales target).

strong cultures

emerge when the company's core values are widely shared among the firm's employees and when the norms have been internalized.

transitional strategy

in which the firm combines the benefits of a multidomestic strategy (high local responsiveness) with those of a global-standardization strategy (lowest cost position attainable).

culture

the collectively shared values and norms of an organization's members

global matrix structure

the geographic divisions are charged with local responsiveness and learning. At the same time, each SBU is charged with driving down costs through economies of scale and other efficiencies. A global matrix structure also allows the firm to feed local learning back to different SBUs and thus diffuse it throughout the organization.