Organizational Change and Design Exam 1
Functional structure
Activities are grouped together by common function from the bottom to the top of the organization
Task Forces
As a temporary committee composed of representatives from each department affected by a problem, the group links several departments to solve common problems. The task force is disbanded after tasks are accomplished.
Symptoms of structural deficiency
- Decision making is delayed or lacking quality - Organization cannot meet changing needs - Employee performance declines, needs are not meet - Too much conflict
Framework for the book
- Four levels of analysis characterize organizations - Organizational behavior is the micro approach - Organization theory and design is the macro examination - Organization design is concerned with the big picture of the organization and its major departments
Organizational Design Alternatives
- Required work activities - Reporting relationships - Departmental grouping options
Conditions for Matrix:
- Share resources across the organization - Two or more critical outputs required: products and technical knowledge - Environment is complex and uncertain
Importance of Organizations
-Organizations are a means to an end -The corporation has played a significant role in the last 100 years -Produce goods and services efficiently -Facilitate innovation -Adapt to and influence a changing environment -Create value for owners, customers, and employees -Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees
Organizational Goal
A desired state of affairs that the organization attempts to reach
Niche
A domain of unique environmental resources and needs sufficient to support an organization.
Strategy
A plan for interacting with the competitive environment
Administrative Principles
A subfield of the classical management perspective that focuses on the total organization rather than the individual worker, introduced by Fayol
Organizational ecosystems
A system formed by the interaction of a community of organizations and their environment
Q: The best way for an organization to cope with a complex environment is to develop a complex structure (rather than keep it simple and uncomplicated).
Agree. As an organization's environment becomes more complex, the organization has to add jobs, departments, and boundary spanning roles to cope with all the elements in the environment.
Q: A CEO's top priority is to make sure the organization is designed correctly.
Agree. Top managers have many responsibilities, but one of the most important is making sure the organization is designed correctly.
Structural alignment
Aligns structure with organizational goals
Efficiency
Amount of resources used to achieve the organization's goals
Organizational form
An organization's specific technology, structure, products, goals, and personnel, which can be selected or rejected by the environment
Virtual network structure
An organizational structure in which the organization subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters organization. - Outsourcing
Matrix structure
An organizational structure that simultaneously groups people and resources by function and by product.
Adding Positions and Departments
As the complexity in the external environment increases, so does the number of positions and departments with the organization, which in turn increases internal complexity.
Stakeholder Approach
Balancing the needs of groups in and outside of the organization that has a stake in the organization's performance
Analyzer
Between the prospector and defender by efficiently maintaining a stable business for current product lines, while at the same time innovating to develop new product lines.
Buffering roles
Can absorb uncertainty from the environment by protecting the technical core from environmental changes and helping it function efficiently.
Mechanistic organization
Characterized by machine like standard rules and procedures with clear authority
Collaborative Networks
Companies join together to become more competitive and to share scarce resources.
Information Systems
Cross functional information systems enable employees to routinely exchange information.
Hierarchy of authority
Describes who reports to whom and the span of control
Organic organization
Design of organization is looser, free flowing, and adaptive
Q: An organization can be understood primarily by understanding the people who make it up.
Disagree. An organization has distinct characteristics that are independent of the nature of the people who make it up. All the people could be replaced over time while an organization's structural and contextual dimensions would remain similar.
Q: The best business strategy is to make products and services as distinctive as possible to gain an edge in the marketplace.
Disagree. Differentiation, making the company's products or services distinctive from others in the market, is one effective strategic approach.
Q: The primary role of managers in business organizations is to achieve maximum efficiency.
Disagree. Efficiency is important, but organizations must respond to a variety of stakeholders, who may want different things from the organization. Managers strive for both efficiency and effectiveness in trying to meet the needs and interests of stakeholders. Effectiveness is often considered more important than efficiency.
Q: Managers of business organizations should not get involved in political activities.
Disagree. Smart business managers get involved in lobbying and other political activities to try to make sure the consequences of new laws and regulations are mostly positive for their own firms.
Q: Organizations should strive to be as independent and self sufficient as possible so that their managers aren't put in the position of "dancing to someone else's tune."
Disagree. Trying to be separate and independent is the old way of thinking.
Divisional structure
Divisions organized according to products, services, production groups
Bureaucracy
Effective approach for the needs of the Industrial Age, calling for clearly defined authority and responsibility, formal record keeping, and uniform application of standard rules. It remained the primary approach to organization design through the 1980s.
Matrix structure largest weakness
Employees have two bosses with conflicting demands
The internal process approach
Evaluates effectiveness by examining internal organizational health and economic efficiency
The resource based approach
Evaluates the ability of the organization to obtain valued resources from the environment.
Rules and Plans
For repetitious problems and decisions, a rule or procedure can be established so employees know how to respond without communicating on each separate issue.
Structural Dimensions
Formalization, specialization, hierarchy of authority, complexity, centralization
Scientific Management
Frederick Taylor's term for the application of scientific principles to the operation of a business
Current Organizational Design Challenges
Globalization Intense Competition Ethics and Green Movement Speed and Responsiveness Social Business and Big Data
Open System Emphasis
Growth and resource acquisition
Human relations emphasis
Human resource development, cohesion, morale
Is competition dead?
In the sense that a single company competing for supremacy with other stand-alone businesses no longer exists, competition is dead. However, a new form of competition is intensifying. Companies find that they must coevolve with others in the ecosystem.
Organization Environment
Includes all the factors that exist outside of the boundary of the organization and have the potential to affect all or part of the organization
Low cost leadership
Increase market share by keeping costs low compared to competitors (Walmart)
Organizations need the right fit between _____ and the________.
Internal structure, External environment
Prospector
Involves innovation, taking risks, seeking out new opportunities and growth.
Defender
Involves retrenchment, beyond just stability, by seeking to keep current customers without innovation or growth.
Uncertainty
Lack of sufficient information about environmental factors
Hawthorne Studies
Led to a revolution in worker treatment from findings that positive treatment improved motivation and productivity.
Boundary spanning roles
Link to and coordinate the organization with key elements in the external environment
Strategy impacts internal organization characteristics
Managers must design the organization to support the firm's competitive strategy
Miles and Snow Typology
Managers should seek to formulate strategy that matches the demands of the external environment. 4 strategies include: - Prospector - Defender - Analyzer - Reactor
Operative Goals
Operative goals designate the ends sought through operating procedures and describe specific measurable outcomes in the short run. These goals concern overall performance, resource, market, employee development, productivity, and innovation and change.
Contigency Theory
Means that one thing depends upon other things, and for organizations to be effective, there must be a fit between the structure and the conditions in the external environment. There is not one best way to manage
The strategic constituents approach
Measures effectiveness by focusing on the satisfaction of key stakeholders, those who are critical to the organization's ability to survive and thrive.
Importance of goals
Mission or official goals provide legitimacy while operating goals provide employee direction
Porter's Five Forces
Model developed by strategy expert Michael Porter that identifies five competitive forces that influence planning strategies.
Complexity
Number and dissimilarity of external elements
Liasion Roles
One or more team members are responsible for regularly communicating with other teams and coordinating the teams' activities as needed
Strategic Intent
Organization's energies and resources are directed toward a focused, unifying, and compelling goal. Consist of the mission, the competitive advantage, and the core competencies (something the org does well in comparison to competitors)
Organization
Organizations are social entities that are goal directed, with deliberately structured and coordinated activity systems, and with a link to the external environment. Open System that obtains inputs, adds value, and discharges products and services back to the environment.
Resource dependance
Organizations depend on the environment but strive to acquire control over resources in order to minimize their dependence.
Resource Dependence
Organizations minimize their dependence on other organizations for the supply of resources Organizations succeed by striving for autonomy Organizations alter interdependent relationships through ownership, contracts, and joint ventures
Geographic structure
Organizing to meet the needs of users/customers by geography
Rational goal emphasis
Productivity, efficiency, profit
Horizontal information systems
Refers to communication and coordination horizontally across organizational departments.
Relational coordination
Refers to frequent, timely, problem-solving communication carried out through relationships of shared goals, shared knowledge, and mutual respect
Centralization
Refers to the hierarchical level that has the authority to make decisions
Complexity
Refers to the number of distinct departments or activities within the organization
Vertical Information Systems
Reports, computer systems, and written information
Interorganizational relationships
Resource transactions, flows, and linkages that occur among two organizations
Reactor
Respond in an ad hoc manner to environmental threats and opportunities, without a long-range plan.
Task Environment
Sector that the organization interacts with directly Examples are: Industry sector, raw materials sector, market sector, human resources sector, international sector
General Environment
Sectors that may not have a direct impact on the daily operations of the firm but that influence the industry or economy in general ways that in turn indirectly influence the organization Examples are: Government sector, natural sector, sociological sector, economic conditions, technology sector, and the financial resources sector
Horizontal linkages
Shared tasks/empowerment, relaxed hierarchy/few rules, horizontal/face-to-face, communication, many teams and task forces, informal / decentralized decision making
Contigency Factors
Size, organizational technology, environment, goals and strategy, culture
Vertical linkages
Specialized tasks, hierarchy of authority, many rules, vertical communication and reporting systems, few teams, task forces, or integrators, centralized decision making
Internal process emphasis
Stability and equilibrium
Sectors
Subdivisions of the external environment that contain similar elements.
Teams
Teams can be the strongest horizontal linkage mechanism. Teams are permanent task forces, often used in conjunction with a full-time integrator.
Horizontal structure
The horizontal structure organizes employees around core processes by bringing together people who work on a common process so they can easily communicate and coordinate their efforts.
Formalization
The amount of written documentation in the organization
Population ecology
The changing environment determines which organizations survive or fail. When rapid change occurs, old organizations are likely to decline or fail, and new organizations emerge that are better suited to the needs of the environment..
Environmental domain
The chosen territory of action defining the niche and external sectors with which the organization will interact to accomplish its goals.
Effectiveness
The degree to which an organization achieves its goals
Specialization
The degree to which organizational tasks are subdivided into separate jobs
Differentiation
The differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments
4 types of measuring effectiveness
The goal approach The resource based approach Internal process approach The strategic constituents approach
The goal approach
The goal approach measures effectiveness by evaluating the extent to which output goals are achieved.
Integration
The quality of collaboration between departments
Information sharing perspective on structure
The structure must fit information requirements of the organization so people have neither too little information nor too much irrelevant information.
Hierarchical referral
The vertical lines which identify the chain of command
Differentiation strategy
To distinguish products or services from others in the industry (Apple)
Integrated Effectiveness Model
Tries to balance concern with various parts of the organization
Full-time integrator
Usually with a title such as product manager, project manager, or brand manager, this full-time position outside the affected departments is created to achieve coordination between two or more departments.
Vertical Information Sharing
Vertical linkages are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization.
Dynamism
Whether the organization operates in a stable or unstable environment