Strategic Management -11

Zappos

they do full day interviews. If you were a superhero, what superhero would you be and why? What would you do if pay was not a factor.

Organizational culture can be the basis of a firm's competitive advantage because __________.

Culture can be regarded as valuable, rare, and inimitable assets

A company offering a limited line of standard products, that competes in a similar manner with a narrow, local market focus, and whose competitive advantage is a focus on low cost derived from gaining economies of scale should organize around a ________.

Functional structure

In the M-form structure, divisions/functional areas can usually be organized around which of the following?

Geographic markets Product/services Groups of related businesses

Standardized Strategy

Global marketing Marketing a product the same way everywhere in the world i.e.: Coca Cola

What is organizational design?

Process of creating, implementing, monitoring, and modifying the structure and procedures of an organization.

Zappos.com started in 1999. It is the largest online shoe store and one of fortune magazine's top 100 places to work. What is the core mission at Zappos?

Provide the best customer service possible.

What is the framework that an organization adopts to divide tasks, deploy resources, and coordinate departments?

Structure

What are the key components of organizational design?

Structure, Culture, and Control

One benefit to a multidivisional structure

Supports Diversification

It is better for founder CEOs to create a relevant culture, structure, and strategy in the early stages.

True

CEO's are fired for their inability to implement strategy effectively.

True or false? True!

Organizational culture can become an important asset if it meets the VRIO principles.

True! Be Valuable, Rare, inimitable, and organized.

Success in the current environment can lead to a firm's downfall in the future. How does this happen?

First, managers achieve mastery and fit with the firm's current environment. Second, the frim often defines and measures success by financial metrics with a focus on short-term performance. Third, the firm puts in place metrics and systems to accomodate and manage increasing firm size due to its success. Finally, as a result of a tightly coupled system, organizational inerita sets in and with it, resistance to change.

All of the following are benefits of a matrix structure.

Flexibility in assigning teams Reduces the duplication of resources Promotes cross-functional collaboration

McDonald's uses detailed standard operating procedures throughout the world to ensure product quality. Therefore, McDonald's has high degree of _________.

Formalization

Company founders define and shape an organization's culture, which can persist for many decades after their depature. What is this phenomenon called?

Founder imprinting

A typical College of Business (or School of Management) has several areas such as management, marketing, finance, accounting, MIS...etc. This is an example of a _________structure.

Functional

One benefit to a matrix structure

Supports specialization and diversification.

One benefit to a functional structure

Task specialization

Regional clusters, a collection of interdependent firms, represent a ______ structure.

Network

Zappos culture

No prejudgments. We all arive at the solutions in different ways. It focuses on a thourough hiring process.

What are Zappos core values?

...

Zappos training

4 week training course. They offer $3000 for people to quit during the first 4 weeks.

Reverse accountability

The employee fills out a ticket about the disagreements against leadership decisions.

Which of the following is a TRUE statement about organizational structures for implementing strategies?

A differentiation strategy requires an organic structure with limited formalization, broad job descriptions, and an emphasis on the product R&D and marketing functions.

Where else can culture come from besides founder imprinting?

A firm's culture can also flow from its values, especially if they are linked to the company's reward system.

These are all true: A positive culture motivates employees by appealing to high ideals.

A positive culture encourages employees to make decisions not only with their heads but also with their hearts. Employees feel that they are part of a larger community by internalizing the firm's values and norms.

This is false

A strong control mechanism needs to be in place to ensure a smooth business operation.

These are FALSE statement about organizational structures for implementing strategies?

An integrated cost-leadership/differentiation strategy requires a command and control structure using high formalization, decentralized decision making, and vertical coordination. A focused strategy requires a functional structure featuring high levels of both specialization and formalization. A cost-leadership strategy requires a simple structure emphasizing high specialization, centralization, and structured job roles.

How do the founders set the initial strategy, structure, and cultrue of an organization?

By transforming their vision into reality.

Tony Hsieh

CEO of Zappos. Research his organizational structure.

Organizational culture is difficult to imitate because of ________.

Causal ambiguity and social complexity

Corporate culture finds its expression in artifacts. What are the artifacts?

Elements like the design and layout of physical space, symbols, and what stories and events are celebrated.

What seems to be the key for Zappos to continue this unusual company culture after more than a decade of being in business?

Employees are able to be who they naturally are.

Norms define appropriate employee attitudes and behaviors.

Employees learn about an organization's culture through socialization.

How do you innovate radical change?

Experiment

How do you do something radical in two hours and for $100? what does Dr. Hames think is the key to winning in the future?

Experiment and then take the best experiments and use them.

One benefit to a simple structure

Low complexity

Zappos offers

Medical, Dental, Vison, Life Insurance, Vacation, Company Discounts, Breakfasts, Lunch, and Snacks. Onsite Wellness services, Sick Time, Flexible Spending Account, Employee Assistance Program, Pet Insurance, Pre-paid legal, Paid Volunteer time off, Monthly Team outings, Car pool programs, Nursing Room, Bereavement Leave, Concierge services, and nap rooms.

Organizational culture describes the collectively shared values and norms of an organization's members.

Moreover, values difine what is considered important.

John Garcia just graduated from Law School and he wants to open up his own Law Office. It is best for John to use a ______ structure.

Simple

Which of the following is TRUE?

Strategy has a more important influence on structure than structure has on strategy.

When using a matrix structure, a firm tends to pursue a(n) ________ global strategy.

Transnational

International Strategy

a strategy through which the firm sells its goods or services outside its domestic market

Localization Strategy

increasing profitability by customizing the firm's goods or services so that they provide a good match to tastes and preferences in different national markets

_____ seek to define and direct employee behavior through a set of codified rules and standard procedures.

input controls

Transational strategy

international strategy through which the firm seeks to achieve both global efficiency and local responsiveness.

The primary avenues of culture change are____.

mergers and acquisitions new leadership change of structure

Manager using the M-form structure to support a ___________ strategy should ideally concentrate decision making at the top of the organization.

related diversification

Organizational structure _________.

specifies the firm's formal reporting relationships, procedures, controls, and authority and decision-making processes

According to Alfred Chandler, structure follows strategy implies that _________.

structure is as dynamic as strategy