Management Exam 2
What are the different organizational forms?
1. functional form 2. divisional form 3. matrix form 4. network form
decline
§ Number of people decline § Cost management and cost reduction = restructuring, realigning resources § Realignment § Restructuring § Focus more on bureaucratic structures that allow more control
assumptions
-A behavior that stemmed from a belief held by a group that is no longer visible, but has become deeply embedded in the organization o deepest level, behaviors you're engaging in are not things that can beasiy talked about, adapted to culture and no longer question it, talking about it can be difficult
Who creates culture or where does it come from? KNOW PYRAMID
-Culture begins to develop quickly in any group of people as they spontaneously interact with each other and establish norms of behavior. In many organizations, the backbone of culture begins with its founder. A founder usually comes to his or her organization with a strong set of assumptions, based on previous experiences, and infuses them into the group. Often it was these ideas that sparked the founder's desire to create something new. o People: what were itnentions of people when they first started company: founder o leaders, COs o Formal organizational structures influence culture o Task requirements: how things get done, what people are supposed to do
Know what HR does from the time they decide to post a job to time people are separated from the organization.
-HR capabilities through planning, recruiting, and selecting. In planning, a company compares its human resources strategy with its financial resources and organizational structure to forecast how many employees it will need and what roles they will fill. Once human capital has been acquired, a firm must then turn its attention to the management of its human capital. To that end, this chapter discusses the various ways in which firms manage their human capital including the design and delivery of training programs, the utilization of performance management systems, and the need to constantly monitor the internal and external environments to ensure that the right resources are deployed in the right way. -Before recruiting a pool of qualified applicants, HR managers must work alongside company leadership to define and plan for their current and future talent needs. This entails both anticipating internal organizational needs and considering the impact of the external business environment. -Before hiring anyone, a company must consider internal resource needs and potential changes as well as the external business environment. Human resource planning is particularly important as firms expand into new regions (both domestically and abroad). Planning is also important when firms decide to produce new products and services, deploy new technologies, acquire a company, or contemplate potential downsizing. Even if the company is not anticipating major organizational changes, HR departments must still plan how to meet current human capital needs. Target, for example, invests in planning to ensure that it is positioned to meet its potential growth needs. The company uses data such as employee turnover by position, month, and department as well as future business projections to determine specific hiring requirements. For some critical positions such as business analysts, Target hires and trains employees well in advance of actual openings. This allows the new employees to be in a position to add value at the right moment. Target also expects its team leaders and managers to develop their bench strength. At any point in time, managers at Target should have one or two direct reports who are being groomed for their positions. This allows vacancies to be filled with speed and conviction. Successful HR planning, like the approach used at Target, requires job analysis job analysis, which is the process of analyzing information about specific job tasks in order to provide a more precise job description and define the characteristics of the ideal candidate for the position. Job analysis can be conducted in a number of ways, including interviews with management and current jobholders, observations in the workplace, and self-administered questionnaires. The absence of an accurate job analysis can lead to problems such as increased recruiting costs, inequities among employees, inadequate job preparation, and wasted training resources. -Once HR managers have discussed anticipated internal changes with the company's leadership, considered how external factors will impact their hiring, done a careful job analysis, developed job descriptions, and determined the desired characteristics in job candidates, it is time to recruit a pool of applicants. Recruiting can take place both internally and externally. Internal recruitment involves choosing qualified applicants for a position from workers currently at the firm, while external recruitment involves finding qualified applicants anywhere else. There are several benefits of hiring internally. First, internal candidates know the company's culture, background, and products, which often allow them to make a quicker and more meaningful impact in the new role. In addition, by hiring internal candidates, the company demonstrates that employees have access to a potential career path that allows for growth and development. The presence of a career path is helpful in attracting high-quality candidates who hope to stay at a company for a significant period of time. Finally, by hiring internally, companies know much more about the skills and potential of the candidate for the position. This knowledge allows the company to be more proactive in properly supporting the individual's transition to the new role. HR managers sometimes seek external applicants who went to specific universities or worked at certain firms. In this process, they will sometimes leverage HR consulting firms, online job boards, and trade shows. Some firms are even using mobile applications to enhance their recruiting efforts. PepsiCo, for instance, realized that many job seekers used their phone to search for new positions while standing in a line, waiting at a restaurant, or watching a sporting event. The company is going a step further by creating the capability for job seekers to not only search but to also apply for jobs using their phone. There are advantages and disadvantages to hiring externally. If the worker is already employed elsewhere, the firm may have to offer higher compensation than planned to encourage the worker to leave his or her current job. If higher compensation is offered, this can lead to equity issues within the firm if employees of similar skill levels are at a lower rate than the newly recruited employee. In fact, recent research shows that workers hired externally are paid 18% more than those in the same job who were hired internally. The extra pay does not always result in better performance. One study noted that workers hired externally had worse job performance marks and were 61% more likely to be fired than internal hires. -selecting talent -managing human capital: ultimately about putting people in the best position to help a company by giving them what they need—whether it is compensation or skills—to perform their job well. First, we discuss how companies develop and train their talent. When employees first arrive, companies spend considerable time and money bringing them up to speed and giving them the skills to perform their specific jobs. -training and developing employees -feedback and performance reviews · Human resource planning o Job analysis: the process of analyzing information about specific job tasks in order to provide a more precise job description and define the characteristics of the ideal candidate for the position § Interviews with management and current jobholders § Observations in workplace § Self-administered questionnaires o Requires benchmarking compensation and benefits offerings § Positions are compensated based on the required combination of: · Education · Experience · Potential talent required to perform a particular job: how unique is skill set, where does it go? o Requires assessment of the business environment to understand the availabity of workers with specific skill levels · Recruiting talent o Internal: finding qualified applications from workers who already work at the firm § Advantages: knowing company culture, background, and products, allows to make a quicker and more meaningful impact in the new role § Demonstrates that employees have access to a potential career path that allows growth and development § Organization is aware of the skills and potential of the candidate § One exception: external recruits can bring a new skill set, new perspective o External: finding qualified applicants outside the firm § Higher compensation offered to external recruits may cause equity issues within a firm · Selecting talent o Reviewing qualitative and quantitative data o Using social media to learn more about potential o Reviewing a candidates past work history o Situations interviews: asking to explain how a candidate would respond in various situations likely to occur on the jobs § Helps predict future behavior § Helps understand candidates analytical abilities o Conducting reference checks o REALISTIC JOB PREVIEW: WHEN AN ORGANIZATION PROVIDES INFORMATION TO JOB CANDIDATES THAT HIGHLIGHTS THE MOST IMPORTANT CONDITIONS OF A JOB INCLUDING ITS POSITIVES AND NEGATIVE ASPECTS § Important to make sure ppl hired don't quit after six months · Training and developing employees o Reasons: § Need to orient employees on business practices § Teach skills with a new piece of equipment § Educate on new product or service offerings o To be effective, training should fit: § Internally with the structure and culture of org § Externally with the strategic, competitive landscape o NEEDS ASSESSMENT: PROCESS BY WHICH ORGANIZATION DETERMINES: § What position to deliver the training § What type of training needs to be done o TYPES OF TRAINING (DIAGRAM) § Formal: · On-the-job · Off-the-job: pay for masters/school § Informal · Coaching: expensive · Mentoring: within company/industry, positive o Development: a longer-term, ongoing process of training that improves an employee's personal abilities over time § Attracts higher quality employees and keeps them more engaged in company § Is effective when the organizition's needs are aligned with the indivieduasls career needs § Ex: paying off student debt, paying for school · Feedback and performance reviews o 360 degree feedback: employees conduct a self-assessment of key competencies and then compare their responses to others in the org § Helps individuals with career planning § Provides realistic view of employee skills, capabilities, and behaviors § Effective tool in leadership development o Performance appraisal: idenotification, measurement, and management of individual performance in organization § Used to make decisions on working conditions, promotions, terminations, rewards § Helps make decisions on measurable goals
organizational structure
-Organizational structure is defined as the pattern of organizational roles, relationships, and procedures that enable coordinated action among employees -allows a firm to perform a variety of activities by dividing the firm's labor force -allows the members of a firm to coordinate their activities through mechanisms such as supervision, formal rules and procedures, plans and budgets, training, and socialization -defines the borders of a firm and its relationships with both the business environment and other firms.
What is off-shoring?
-When a company outsources a business activity to a contractor in a foreign country -outsourcing of business functions does not necessarily guarantee higher profits for a business. In many cases, the success of outsourcing is driven by a firm's ability to effectively manage people in different locations. -Many firms make common mistakes with respect to their offshoring activities. First, they spend too much time identifying cities, countries, and vendors for their offshoring needs and not enough time deciding which activities should be offshored in the first place. For example, managers often fail to designate core processes that the firm must keep in-house for competitive reasons. Second, managers do not account for the inherent risks in offshoring a process. Some managers fail to realize that offshoring can give a vendor the upper hand in the relationship, which can increase the vendor's negotiating power in later transactions. Finally, many managers fail to realize that instead of offshoring, they can outsource locally or even set up an alliance with a partner. Outsourcing is a complicated issue. While the practice can lower a firm's cost structure, it can also create growing unrest about the loss of jobs and concerns over working conditions and standards in foreign countries. One company that encountered such challenges was IKEA · outsourcing a business activity to a contractor in a foreign country: better or cheaper source of labor o Common mistakes: risks, revolve around need/no need to have skill sets internally, if you outsource you may lose skills
What are the levels of culture?
-artifacts -beliefs & values -assumptions
When is culture most important or crucial?
-when someone joins a new organization or takes charge of a new team in an organization. Culture is particularly important to understand in the merger and acquisition process. One study of mergers identified that 90% of them never live up to their expectations. The culprit: a clash of corporate cultures between the merging organizations. o Mergers and acquisitions: how do you merge two different cultures o Understanding the culture of the acquiring firm as well as the culture of the firm being acquired o Combining the two companies § Where are the similiarities and differences? § What needs to change? § How will the value of both cultures be maximized? o Key point for managers to keep in mind is that much of the value of an acquired firm may be in its culture
What is the balanced scorecard and what are the components of it?
-created to help businesses translate strategy into action by identifying the most critical measures to drive business success and by linking long-term strategic goals with short-term operational actions. The primary advantage of using a balanced scorecard, however, is that it helps managers create a set of quantitative and qualitative measurements that are related and mutually reinforcing, known as cause-effect relationships. It allows companies to quickly look at failures and isolate what may be their root cause. At the same time, it also allows them to understand the source of their successes. With 25-30 measurements, the balanced scorecard is often a complement to the traditional measures that companies use to monitor their health. o Financial perspective: framework for choosing the financial measurements that are most important for reaching strategic goals § Activity-based costing: accounting system used to assess the specific cost components of producing a product/service § Other metrics: EPS, revenue, profit, dividend rate o Internal business process perspective: comes in later § Framework that focuses on measurements that will improve a company's ability to serve its customers and deliver value propositions to its customers o Learning and growth perspective: how companies change and integrate over time to create more competitive structure in org: skills, how interact with customers EMPHASIS ON CHANGE, identifying gaps in capabilities of resources and how can we change to be better in areas o Customer perspective: framework that links key customer-based metrics such as market share and retention to the financial performance of a firm § Value propositions: quantitative and qualitative things that customers value: what do they value, how are we doing that, what is our market performance
bureaucratic approach
-highly formalized and are characterized by extensive rules, procedures, policies, and instructions. Positions are arranged hierarchically with top management dictating the direction and activity of the organization while lower-level managers and employees follow orders. The fundamental mechanism of monitoring involves close personal surveillance of superiors over subordinates. To be successful in a bureaucracy, individuals must accept the formal authority and learn the expected rules and regulations. -As firms grow in size and complexity, bureaucracies can be an efficient way to cope by structuring activities and creating more formal mechanisms of communication and control. In addition, bureaucracies can withstand a diverse workforce and high turnover. While a bureaucracy is often considered the most fair and efficient method of control, the formalized rules and surveillance can be troublesome. The hierarchy and constraints that are advantageous in some environments are, for the same reasons, disadvantageous in others. Bureaucracies are not useful in creative and innovative environments, ones that need to respond to changing, dynamic markets -hierarchies: narrowly defined roles, a lot of routine, o Advantages: efficient, can withstand high turnover, provides focus for diverse workforce o When Appropriate: large, complex orgs, measurable tasks, price-competitive and cost-sensitive industries o As companies get bigger, tend to follow this approach (exceptions: Vor?)
growth
-more people, need to have control over people/what they do, establishing roles and hierarchies § Efficiency § Standardization § Consolidation and control § Protection of the status quo § A lot of companies don't survive move from start-up to growth
clan approach
-roles and responsibilities are more loosely defined -The key characteristics of clans include self-supervising teams that are responsible for a set of tasks. In the clan, each member is cross-trained to be able to perform multiple tasks, and individual goals and values completely overlap with the organization's values. One of the core advantages to the clan is the self-regulating characteristics of its employees. Workers collaborate on projects and must negotiate proper team behavior, often using the organization's mission and values as a guide. -preferred when conditions are uncertain and work activities are difficult to measure. When a company is subjected to uncertainty in the environment, employees need to adapt and change along with the context, which happens most easily in a clan because it tolerates diverse working styles and performance. Because low turnover and guaranteed employment are important to sustain a clan system, companies that operate in price-competitive and cost-sensitive industries find clan systems to be challenging (see Figure 7.1). Having made some broad organizational design choices regarding division of labor and coordinating mechanisms, a leader should then consider specific organizational structures that, in turn, shape how the firm will implement its strategy. -self-regulating/self-organizing, good depends on situation depending on life cycle of firm o Advantages: elicits commitment, employees are self-regulating, can easily adapt to new environment o When Appropriate: uncertain conditions, quickly changing industry, work activities difficult to measure
beliefs & values
-the meanings that members of an organization attach to artifacts o stated, google them, but different than meaning that org members have for those values o explicitly states norms and values
What is a realistic job preview?
-the process of providing information to job candidates, which highlights the most important conditions of a job, including its positive and negative aspects. Traditional job descriptions generally do not include the negative aspects of the position. Although it may seem strange that a recruiter would reveal the unappealing aspects of a job to a potential candidate, RJPs have been shown to decrease turnover.In essence, job candidates obtain a more comprehensive understanding of the expectations and nature of the position before they make a formal commitment. The firm must also consider that in some cases RJPs can lead to a smaller pool of applicants if the negative aspects of the position discourage some individuals from continuing in the recruiting process. Once the HR managers have recruited a pool of applicants and informed them of both the positive and negative aspects of the job, the next task is to select the best candidates. o WHEN AN ORGANIZATION PROVIDES INFORMATION TO JOB CANDIDATES THAT HIGHLIGHTS THE MOST IMPORTANT CONDITIONS OF A JOB INCLUDING ITS POSITIVES AND NEGATIVE ASPECTS § Important to make sure ppl hired don't quit after six months
artifacts
-visible organizational structures, processes, and languages o Physical: logos, building designs, languages o stories, rituals, ceremonies o ex: horns on campus
firm's life cycle
1. start-up 2. growth 3. decline
competitive advantage
It derives from a firm's ability to create value for its customers that exceeds the cost of producing the product or service.
How does design relate to the life cycle of the firm?
The choices that managers make regarding organizational design options should be aligned with the life cycle stage of the firm—start-up, growth, maturity, and decline. For instance, start-up firms are generally characterized by less job specialization, heightened coordination, broad decision rights, and open boundaries. When such firms evolve from an informally run organization to greater formalization, they typically embrace a functional structure. As a firm matures and grows in size, it tends to emphasize division of labor and specify distinct coordinating mechanisms to ensure greater efficiency and control, leading to a divisional structure. Once a firm reaches maturity, it may face more complex markets necessitating it to operate an organization that simultaneously tackles multiple constraints, leading it to embrace a matrix structure. When a firm evolves, the nature of leadership should also fit its life cycle stage (see Figure 7.8). The leadership activities and priorities that are important in the early stage of a business often need to change in the growth or maturity phase. Managers, for their part, have to learn to change their styles and priorities to meet the changing demands of the business as well as the fundamental changes in the contextual environment.
What is the connection between strategy and organizational design?
The growing complexity of the competitive landscape, the rapid pace of change and globalization, and the need to properly align and motivate employees have contributed to the importance of linking a firm's organizational designwith its espoused strategy. Organizational design refers to the formal systems, levers, and decisions an organization adopts or employs in pursuit of its strategy. While some have argued that there is a hierarchical relationship between strategy and organizational design whereby design follows strategy, considerable evidence shows that strategy and organizational design are co-evolutionary and reciprocal in nature. For instance, a firm that hopes to pursue a cost leadership strategy will most likely make a series of organizational design decisions that emphasize operational efficiency, cost reduction, and internal integration or alignment. Companies that seek to pursue a differentiation strategy will make different organizational design decisions, including ones that emphasize innovation, creativity, flexibility, and speed. From our discussion thus far, it should be clear that without a well-defined organizational design, many firms will struggle to develop and maintain a competitive advantage in the marketplace. Organizational design encompasses several important decisions. For instance, how will jobs be divided and how much autonomy will be allowed throughout the organization? Should jobs be formalized, structured, and standardized? Should the company focus on customers, geographic regions, product categories, or functions? The choices made in each of these areas will influence the overall context of the organization.
What are the aspects of organizational change (e.g. planned vs organic)?
Triggers of change: § Reactive: something going on in marketplace, what do we need to do § Proactive: see shift in society, you can try to introduce new products that appeal to changes being adopted Origination of change § Planned: top-down approach, CEOs and execs saying § Organic: lower level, natural process that ppl recognize they need to make changes Magnitude of change § Incremental: small changes: realignment or new product § Transformative: comprehensive restructuring: massive layoffs, hiring's, hierarchies changing
What is benchmarking?
broadens a manager's perspective to look outside the company, primarily at competitors, to assist with target setting. Benchmarking is the process of collecting data from the industry's best players and using their measures as a goal or guideline. While the goal is to learn how an organization compares to others on specified measures, it has industry-wide benefits. Benchmarking promotes competition and reveals best practices so that they can be analyzed, adopted, and implemented throughout an industry. Benchmarking also has benefits within an organization. It stimulates an unbiased review of internal operations, reveals problems for which others have found solutions, and provides objective data and targets for improvement. When implemented appropriately, benchmarking includes the following: Identifying the processes to benchmark Choosing measurement criteria and collecting data Finding the best companies for each process Analyzing data Creating plans for improvement If a company adopts a rigorous benchmarking program, members of an organization apply all of their energy and ingenuity to improve their performance, in hopes of matching or exceeding their competitors. The most difficult hurdle to overcome is finding other companies to share their processes and data. Few companies regularly collect and share data, making it costly to find useful benchmarking partners. Still, any effort to look outside the company for best practices is useful. While it may be difficult to implement a full benchmarking program, elements can be used effectively with other systems described in this chapter. One novel technique that some managers are using to benchmark their operations is job swaps. In a job swap, one executive switches jobs with another executive at a different company for a day or a few days. For instance, Dharmesh Shah, the chief technology officer (CTO) of HubSpot.com, an Internet marketing firm, traded jobs with Paul English, the CTO of Kayak.com, an online travel pricing company. Shah hoped to understand how to recruit top engineers to his firm and how to improve customer service. He walked away from the experience with several insights for improving his start-up. Of course, job swaps must be carefully selected. They tend to be useful when there is a lot of trust between the two executives, and the companies are in different, noncompeting industries. o process of collecting data from the industry's best players and using their numbers as a goal or guideline for evaluating company's performance § Inventory turnover, wasted resources § STEPS IN BOOK
centralized decision making
bureaucratic approach
decentralized decision making
clan approach
How do leaders overcome resistance to change?
esistance to change originates at an individual level and then amplifies when you aggregate groups of people who are all hesitant about change. At an individual level, the costs may be social, psychological, emotional, political, or financial. Most of us don't like change once we are comfortable with a certain way of doing things. Change often requires a reevaluation of roles, priorities, and processes. As part of the change process, employees could lose their positions, sense of identity, or friends. Employees may also need to learn new competencies, build new relationships, and invest significant time and energy in "reinventing" themselves. This can be a scary process. As such, people may legitimately fear a loss of influence or status in an organization. Everything they had previously worked toward may now be irrelevant. Gripped by fear or uncertainty, employees can resist change by either overtly refusing to engage in the process or through passive/aggressive actions—acting as if they support the process, but doing nothing to move it forward. As one researcher noted, all employees possess a "silent veto power" that they can exercise at any time if they disagree with a change initiative. This type of veto power is very difficult to overrule. Employees may also resist change if they believe the change is not right for the organization or if they do not understand the reasons behind the change process. In these situations, leaders need to do even more to communicate the reasons for change and to build trust throughout the organization. -One way to better understand resistance to change is to assess an organization's resources, processes, and values.An organization's resources can dramatically affect the difficulty of engaging the organization in change. Resources include people, equipment, and capital, but they also include intellectual property, brand identity, R&D designs, and relationships with customers, distributors, and suppliers. Organizations that have "access to abundant high-quality resources" face a double-edged sword. At one level, they are in a better position to successfully confront resistance to change but, at another level, the abundance of resources means greater attachment to the status quo and a lack of urgency in the organization. Organizations with poor brand images, lack of cash, or people without the necessary skills to drive change can have lots of urgency within the organization but simply lack the resources to drive change efforts. While resistance to change ultimately resides within individuals, it is exacerbated by organizational systems. Over time, organizations develop formal processes such as workforce planning and informal processes such as those that determine how decisions are made to allocate resources. The very nature of these processes invites employees to act the same way every time. Their sameness brings greater speed and efficiency. Yet these routines and systems become ingrained in the organizational practices and can produce a massive amount of resistance when organizations begin a transformation initiative. Breaking these processes can be extremely difficult. The values of an organization are another key factor to consider in managing resistance to change. In the change process, values refer to the manner in which employees work together and set priorities about what is important. In essence, values are reflected in the culture of an organization and impact the way people think and act. What people believe; what they value; what their expectations are for the ways things should be done; and what actions they take because of those predispositions often are the most crucial part in determining whether an organizational change effort will succeed. As noted in Chapter 8, a strong set of values combined with a strong culture can be a formidable barrier to change.
customer perspective
o : framework that links key customer-based metrics such as market share and retention to the financial performance of a firm § Value propositions: quantitative and qualitative things that customers value: what do they value, how are we doing that, what is our market performance
Why do companies start change processes?
o Compete more effectively o Improve performance o Survive as a competitor
matrix form
o DUAL REPORTING STRUCTURES: REPORTING TO ONE MANAGER IN DIVISIONAL FORM AND ONE MANAGER IN THE FUNCTIONAL FORM o Example: Yahoo o You don't have a boss who is responsible for you, you have two bosses o Employee development and promotion is harder. Do managers talk or not? Know each other? Like each other? Both decide how you get trained, promoted and where?
total cycle time and TQM
o How can you make it easier, more effiecient to manufacture process (steps to combine or eliminate) o How reducing cycle time improves quality: § Reveals deficiencies in materials and processess provides more opportunities to improve quality § Reduces number of steps involved from production to delivery = reduces chances for mistakes § Decreases labor and overhead costs, cuts inventories, and reduces rework
what contributes to global change?
o Increasing globalization o Disruptive innovation: juul, o Proliferation of technology: faster, companies focus more on adoption of techs
External fit
o Is affected by the type of competitive strategy that a company pursues o Cost leadership strategy: HR practices should focus on cost-effectivly increasing productivity o Differentiation strategy: HR practices should include § Constant feedback system § Moderate collaboration across functions § Employee participating in decision making o Focused innovation strategy: HR practices include: § Greater autonomoy and room for experimentation § Ample opportunities for development and training
What are the components of the change process and how do they fit together (e.g. Costs Associated with Change)?
o Model: a vision for change o Change model § Tells clearly what is being changed and why § Offers employees hope and higher sense of meaning § Fits with firm's expected contextual landscape o Communicating the model requires: § An appeal to logic and emotions § Making a compelling case for change based on benchmarking · Implemenation process: steps to success o Process: series of plans and approaches to implement a change effort § Establish a sense of urgency and form a powerful guiding coalition § Develop a vision and communicate it § Empower other to act on the vision § Plan for and create short-term wins § Consolidate improvements and produce more changes § Institutionalize changes in the culture · Characteristcs of effective models o Desirable: § Satisfies stakeholders § Motivates employees o Feasible § Opportunity for short term wins § Realistic stretch o Relevant § Contextually sensitive: responsive to environment that firm is in · Resistance to change o Complacency/inertia o Roles and relationships: ppl aren't always willing to change o Priorities and politics: undermining higher ups to get promotions o Processes o Passive/aggressive actions · Costs of change o Social: loss in social standing o Psychological: understanding where you fit in o Emotional: things change, especially if you lose a job o Political: lose power o Financial:
network form
o More companies moving towards this o Intent to blur lines between what org does and what outside entities do o Internal entities work with people outside company: contractors o Each people could be in self-regulating team without oversight of manager, interacting through self-organizing, more flexibility (can move vendors and contractors rather than employees) o Example: Zappos
internal fit
o Need HR practices o Building and aligning HR practices in support of the company's strategy o Is a source of competitive advantage when a firm's human resources: § Add value to the firm § Cannot exist outside of the company § Cannot be easily imitated by other companies § Cannot be substituted by another resource
What is the rule of 1/8th?
o One must bear in mind that ½ of orgnaizations wont believe the connection between how they manage their people and the profits they earn. ½ of those who do see the connectons will do what many organizations have done - try to make a single change to solve their problems, not realizing tht the effective management of people requires a more comprehensive and systematic approach. Of the firms that make comprehensive changes, probably only ½ will persist with their practices long enough to actually derive economic benefits.
functional form
o Organized by function that you are doing: finance, marketing, sales, production, R&D o People don't have much exposure outside of their deparment o Not getting interaction, all departments should know the information, but only one department knows o Problem bc industries changing faster, more cross-functional o Most common form o Example: Starbucks: marketing department, supply chain department, global department o Advantages: new employee in marketing in finance o Disadvantage: how do you get exposure to other departments at organizational level not functional level
divisional form
o Part of Bureaucratic o Organized by project, customer service area, o Each division has each functional area underneath it o Disadvantages: can be redundant, more expensive, can exaggerate loyalty (allocating money to divisions, often political) COMPETING FOR RESOURCES which misaligns motivations of employees o Advantages: learning a lot more about company, knowledge transfer across departments o Example: Ford, executives and vps in different regions
disruptive innovation
o Sustainable technologies: improve the performance of established profucts, along the dimensions of performance that mainstream customers in major markets have historically valued § Ex: different iphones o Disruptive technologies: innovative forces that include a different set of attributes than those valued by mainstream customers § different set of attributes that mainstream consumers may not care about but have potential to become mainstream § ex: Neurolink, AI interfaces, § Ex: a few people try and like, get momentum, replaces other products o Options to grow innovation § Create a serpate in-house org where processare and values are developed § Divide and create an independent org designed to specifally build new innovation § MORE COMMON buy capacity to handle and build the new innovation by acquiring a firm that has the resources to do so ex: start ups, microsoft buying smaller companies § ex: self-driving cars
What are different ways to monitor performance (e.g. TQM)?
o Total quality management TQM: satisfaction of customer needs through a set of four reinforcing principles: customer focus, process focus, teamwork and participation, and continuous improvement o Six sigma: disciplined, quantitative approach to improve cycle time, reduce costs, and eliminate waste with a technical goal of 3.4 defects per million (six standard deviations from the mean) o DMAIC: define, measure, analyze, improve, and control o ISO 9000: international control mechanism that pursues high-quality products by ensuring high-quality production processes
flexible work options
o Variable work schedule: set schedule, different for different employees o Flexible work schedule: not set, you can work when you need to work to get things done o Job sharing: two people performing single role, maybe splitting hours o Telecommuting: ability to work from home
separations
o Voluntary: § Retirement and choosing to leave o Involuntary § Termination: low performance § Lay-offs: not because of your attributes, restructuring or cost reductions o Downsizing: a process designed tor reduce ineffieciency and waste that builds up in an organization over time in an effort to be more competitive o Survivor syndrome: a condition that can occur when certain employees who survive a downsizing become narrow-minded, self-absorbed, resentful or risk averse: I don't want to offer my opinion bc different than manager, a lot of what-ifs
Are human resources strategic?
o YES o Old HR: probably would apply for job in benefits, salary, selection, investigations § Benefits jobs will probably be first to go o Jobs that won't go away in HR: culture HR hires people that creates/change that culture, building structure: creating org structure by creating which roles need to get performed and how, attracting talent: if you can't get best people to apply then never be able to hire best people so need to develop more = more expensive, best people = more successful o Career path through HR might be best suited for CEO role, more true as companies start looking at how employees will make them better aka resources
business process perspective
o comes in later § Framework that focuses on measurements that will improve a company's ability to serve its customers and deliver value propositions to its customers
start-up
o focused on survival § Opportunity identification § Focus on innovation § Access to capital § No formal reporting structure, don't know where you'll be in the future § More network oriented structures
financial perspective
o framework for choosing the financial measurements that are most important for reaching strategic goals § Activity-based costing: accounting system used to assess the specific cost components of producing a product/service § Other metrics: EPS, revenue, profit, dividend rate
learning and growth perspective
o how companies change and integrate over time to create more competitive structure in org: skills, how interact with customers EMPHASIS ON CHANGE, identifying gaps in capabilities of resources and how can we change to be better in areas
resource-based view of a firm
o people are rare, hard to find KNOW DIAGRAM § History: Experiences that people have and routines and other things going on in organizations make it hard for other companies to imitate that § Numerous small decsions: 1,000 slightly better decisions, add up to perfromance differences § Socially complex resources: if I am in a company working with five people, work well together, another company asks you to go to their company, success is from other people and community, no garuntee that it will work at the other company = make sure to attract, retain, and motivate people at org.
change process formula
· : D x M x P > Rc + Cc takes costs and makes them less than multiplicative costs o D = dissatisfaction with status quo o M = new model for org. o P = process for change IF YOU CANT GET ALL OF THEM, YOU CANT GET ANYWHERE o Rc = resistance to change o Cc = cost of change that employees experience
HR stages
· Stage 1: Initiation o Loose, informal management o Basic salary and benefits o Flexible job definitions · Stage 2 Functional Growth o Responding to business needs in compensation and benefits o Add training and development programs o Recruit specialists · Stage 3 controlled growth o Formalized control measurements and goals o Routine performance appraisals o More formal control mechanisms o More well defined job roles and functions · Stage 4 funcational integration o Long-range planning o Generate interdisciplinary training programs o Succession planning o More formal planning and hiring cycles · Stage 5 Strategic Integration o HR fully integrated with strategic direction o Long-range planning Training and development focused on strategic issues
What is the control cycle and how does the balanced scorecard fit into it?
· the four-stage process that provides the mechanisms and systems to monitor the transformation process, ensuring that outputs are produced to the desired quality, quantity, and specifications of an organization and its customers o Whatever a firm is doing/creating and selling, it produces outcomes, companies need to keep track of outcomes
