Management Test 2
Informal Structures Built Around Assumptions
- "Hidden" aspect of an organization - Develop over a period of time - Not listed in the firm's bylaws or management practices - Are affected by organizational changes
Mistakes Managers Make
- Assuming that victim and harasser are opposite sex - Assuming that harassment only occurs between coworkers or between supervisors and subordinates - Assuming that only people who have been harassed can file complaints.
Divisional Form
- Can be organized around products, geographies, or clients - Each division is accountable for its own profit and loss - Employees feel more loyal towards their division rather than function - Allows greater accountability - Promotion is based on management capabilities across divisions rather than functional expertise All types of divisional forms have their own advantages and disadvantages
Informal Structures
- Contribute in defining an organization - Develop over a period of time - Not listed in the firm's bylaws or management practices - Are affected by organizational changes
Bona Fide Occupational Qualification (BFOQ)
- Exception to certain hiring practices that would otherwise be considered prohibited discrimination. - BFOQ must be "reasonably necessary to the normal operation of that particular business." Which protected characteristic generally never is considered a BFOQ? - Race - While religion, gender, or national origin may be considered a bona fide occupational qualification in narrow contexts, race can never be a BFOQ
Common Mistakes of Offshoring
- Managers spend too much time identifying vendors for their offshoring needs and not enough time deciding which activities should be offshored - Managers do not account for the inherent risks in offshoring a process - Managers fail to realize they can outsource locally or set up an alliance with a partner.
What Should Managers Do?
- Respond immediately - Write a clear sexual harassment policy - Establish clear reporting procedures - Be aware of local and state laws and enforcement agencies.
Wells Fargo: A Crisis of Culture, Not Control
- Wells Fargo opened as many as 2 million deposit and credit-card accounts without customers' knowledge. The problems affected most of the product types sold in bank's 6,000 branches. - For 5 years, Wells Fargo conducted investigations into improper practices, hired consultants and tinkered with sales and compensation incentives - Questionable sales tactics persisted, though, and were and open secret in Wells Fargo branches across the country.
Reward Systems: Compensation and Benefits
1. Gain-sharing: A team-based compensation structure that rewards teams based on the achievements of certain metrics associated with productivity, efficiency, or quality 2. Profit-sharing: A team-based compensation structure that shares rewards based on improvements in profitability 3. Cafeteria plans: An arrangement that allows employees to make their own choice about benefit options
Divisional Organizational Structure
1. General Management: 2. Division A: R&D, Production, Sales, Marketing and Finance 2. Division B: R&D, Production, Sales, Marketing, and Finance
Guidelines for Setting Goals
1. Goals to easy or too simple: Limits Performance 2. Challenging But Attainable: Peak Performance 3. Goals too Difficult or tasks to complicated: Demotivates Employees
Steps in Benchmarking
1. Identifying the processes to benchmark 2. Choosing measurement criteria and collecting data 3. Finding the best companies for each process 4. Harvesting and analyzing data 5. Creating Plans for improvement
Reward Systems: Compensation
1. Job Based Pay: Determined by the nature of a particular job 2. Skill Based Pay: Determined by an individual's personal skills and knowledge
Contextual Forces Impacting Human Capital
1. Legislation 2. Labor Mobilization 3. Globalization
Coordinating Mechanisms
1. Organizers (Scientific Management): Those who believe that more control is warranted in organizational design to ensure that jobs are performed satisfactorily and efficiently - Greater job standardization - Specific definitions of roles and responsibilities - More hierarchical leadership 2. Extreme Form---Bureaucratic Approach: Organizational control built around systems that are highly formalized and are characterized by extensive rules, procedures, policies, and instructions. - Close personal surveillance of superiors over subordinates. - Not useful in creative environments 3. Behaviorists (Human Rights Movement: Those who support a more open organizational structure where roles and responsibilities are loosely defined. 4. Clan Approach: A type of organizational control that includes self-supervising teams that are responsible for a set of tasks.
Recap Chapter 1: Theories of Management
1. Scientific Management: A focus on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods. 2. Human Relations Movement: The belief that organizations must be understood as systems of interdependent human beings who share a common interest in the survival and effective functioning of the firm 3. Contingent View: A view of the firm where effective organizational structure is based on fit or alignment between the organization and various aspects in its environment.
Cultural Socialization
1. Socialization: The process of understanding how work gets done and how individuals should interact in an organization. 2. Organizational Commitment: The desired end result of socialization whereby employees become committed to the organization and its goals
Role of Leadership across Life-Cycle Stages
1. Start-up: - Opportunity identification - Focus on innovation - Access to capital 2. Growth: - Efficiency - Standardization - Consolidation and control - Protection of the status quo 3. Decline: - Cost management - Realignment - Restructuring
Feedback and Performance Reviews
360-degree feedback: Employees conduct a self-assessment of key competencies and then compare their responses to others in the organization - Helps individuals with career planning - Provides realistic view of employee skills, capabilities, and behaviors - Effective tool in leadership development Performance appraisal: The identification, measurement, and management of individual performance in organizations - Used to make decision on working conditions, promotions, terminations, and rewards - Helps make decisions on measurable goals
Selecting Talent: Structured Interviews
4 types of questions are typically asked in structured interviews: 1. Situational Questions 2. Behavioral Questions 3. Background Questions 4. Job-Knowledge Questions
Acquiring Human Capital: Two Essential Considerations
A firm's structure, systems, human resources, and management practices must match the competitive landscape Requires managers to match HR practices with a company's: 1. Stage of Growth 2. Strategic Objectives
Sexual Harassment
A form of discrimination in which unwelcome sexual advances, request for sexual favors, or other verbal or physical conducts of a sexual nature occurs. There are two legal kinds of sexual harassment: 1. Quid Pro Quo sexual harassment 2. Hostile work environment
How Do/Should Leaders Affect Culture?
A leader's role in shaping culture: - Inspire all managers and employees to do their best - Empower employees and managers to make independent decisions and to find ways to improve operations - Reward achievement with pay based on performance, and continue raising the bar - Reward achievement with non-pay perks such as new assignments and employee recognition - Create a challenging work environment - Establish and abide by a clear set of values
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 the company - Is effective when the organization's needs are aligned with the individual's career needs
A company can be organized into divisions based on?
A. Products B. Small, medium, and large clients C. Northeast, Southeast, Northwest, Pacific, Midwest D. USA and International E. All of the Above
HP (Hewlett Packard) Decision Making
Additional Products (aka related diversification) - HP 12C calculator - Printers and other products One of the employees created a new type of computer - Hewlett Packard was offered the right of first refusal - Took too long to make a decision
Bureaucratic Approach
Advantages: - Efficient - Can withstand high turnover - Provides focus for diverse workforce When Appropriate: - Large, complex organizations - Measurable tasks - Price-competitive and cost sensitive industries Examples: Most fast food restaurants, many industrial companies, state universities.
Clan Approach
Advantages: - Elicits commitment - Employees are self-regulating - Can easily adapt to environment When Appropriate: - Uncertain conditions - Quickly changing industry - Work activities difficult to measure Examples: Some start-up, consulting, advertising, and high tech companies.
Organizational Flexibility
Ambidextrous Organizations - Maintain efficiency in current strategic operations while preparing for imminent changes - Create a separate team to work on future opportunities while the rest of the firm focuses on the primary business - What McKinsey calls an "Agile" organization
Driving Success in Your Career
Before considering different career options an individual must determine: - His strengths and values - What he would like to do - What he is good at - What are his interests Feedback analysis - Strategy for discovering individual strengths - Involves tracking the results of an individuals key actions and decisions.
Control Loss to Crisis
Chipotle food safety problems
Matrix Form
Combines the positive elements from different organizational configurations to: - Cope with strong environmental pressures - Assist complex internal interrelationships - Facilitate sharing and optimization of resources To facilitate optimized performance, uses: - Technological expertise within functions - Horizontal Coordination across the functions Assigns equal authority to both divisional and functional managers.
Decision Rights
Concern how decisions are made: - How information should flow through the organization - Who should make decisions regarding that information Rights that include initiating, approving, implementing, and controlling various types of strategic or tactical decisions - Differ based on vertical and horizontal dimensions Delegation: The process by which managers transfer decision rights to individual employees.
Determinants of Culture
Context: 1. People 2. Formal Organization 3. Task Requirements 4. Leader ==Culture
Control Loss
Control: Achieved when behavior and work procedure conform to standards and goals are accomplished. Control Loss: Occurs when behavior and work procedures do not conform to standards Consequences of Control Loss: - Failure to achieve organizational goals - Restatement of earnings - Replacement of senior management - Drop in stock price - Shareholder lawsuits, etc.
Recent trends in Organizational Design
Customer Centric Model: - Coordination - Connection - Cooperation - Capability Development
Understanding Culture
Deciphering the roots of a firm's culture: 1. An appreciation of its values and philosophy or purpose 2. An understanding of the group's boundaries 3. An understanding of its power structure 4. An understanding of its work rules and norms 5. An evaluation of its reward and punishment system
Functional Form
Each functional department conducts its own budgeting and planning processes. Works well for small businesses and businesses with a limited number of products or services Supports: - Easy flow of communication - Straightforward approach to supervision - Reduced level of redundancy Best suited for competitive situations that require efficiency of production of functional expertise
Setting Goals
Effective goals are SMART: S- Specific M- Measurable A- Attainable R- Realistic T- Timely
Culture and Crucial Moments
Evaluating culture in mergers and acquisitions - Understanding the culture of the acquiring firm as well as the culture of the firm to be acquired - Combining the two cultures: ----Where are the similarities and differences? ----What needs to change? ----How will the value of both cultures be maximized? Key Point for managers to keep in mind is that much of the value of an acquired firm may be in its culture.
The Legal Environment
Fair Labor Standards Act of 1938 - Transformed the working environment: - Minimum conditions for health, safety, and general well-being - Federal minimum wage - Maximum hours for a work week - Officially banned child labor Violators were subject to severe fines and possible imprisonment
Balanced Scorecard: Financial Perspective
Financial KPIs: - Net Income - Cost of goods sold - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) - Inventory management - Accounts receivable aging - Return on equity/Return on Assets Activity Based Costing (ABC): - The accounting system used to assess the specific cost components of producing a product or service.
Types of Training
Formal: - On-the-job - Off-the-job Informal: - Coaching - Mentoring
The Process of Cultural Socialization
Forms of Cultural Socialization: - Statements of philosophy, creeds, values - Design of physical spaces - Role modeling, leader examples, teaching, and coaching - Reward systems and norms - Stories, legends, myth, and parables - What leaders pay attention to, measure, and control - Leader reactions to critical incidents and crisis - Design of the organization - Criteria for recruiting, selecting, promoting, and managing employees.
Functional Organizational Structure
General Management: R&D, Production, Sales, Marketing , and Finance
Federal Anti-Discrimination Employment Laws
General effect of the laws: employers may not discriminate in employment decisions based on sex, age, religion, color, national origin, race, or disability. Narrow Exception: A bona fide occupational qualification (BFOQ) is "reasonably necessary to the normal operation of that particular business."
Case Study in Organizational Design
HP (Hewlett Packard) Started in 1939 in a garage in Palo Alto, California (now Silicon Valley)
HP Re-organization
HP Response to customer irritation: - Sell total services and solutions, rather than individual products Reorganize into: - Large Customers - Small Customers - Public Sector - Etc. Reorganization by customer type, 1 sales executive to call on each corporation
HP Re-organization to product groups
HP established a division structure with each product group becoming a self-sustaining organization responsible for developing, manufacturing and marketing its products.
HP Radical Re-org: Splitting in Two
HP split into two separate companies
Offshoring
Outsourcing a business activity to a contractor in a foreign country.
Training and Developing Employees
Reasons: - Need to orient employees on business practices - Teach skills with a new piece of equipment - Educate on new product or service offerings To be effective, training should fit: - Internally with the structure and culture of the organization - Externally with the strategic, competitive landscape Needs assessment: Process by which an organization determines: - What type of training needs to be done - Who is best positioned to deliver the training
Selecting Talent
Reviewing qualitative and quantitative data Using social media to learn more about potential Reviewing a candidate's past work history Situational interviews - Asking to explain how a candidate would respond in various situations likely to occur on the job - Helps predict future behavior - Helps understand candidate's analytical abilities Conducting reference checks
HP Impact of Divisional Structure
Same company would get 4 HP salespeople calling on the SAME purchasing manager
Selecting Talent: Selection Tests
Selection Tests: Used to measure qualities directly or indirectly related to job performance. Types of selection tests: 1. Specific ability tests 2. Cognitive ability tests 3. Biographical data (biodata) 4. Personality tests 5. Work sample tests
Recent Trends in Organizational Design
Silos: A functional or divisional unit that operates by its own rules and guidelines and does not openly share information with other units.
Division of Labor
The manner in which work in a firm is divided among employees. Advantages: - Creation of highly specialized jobs can help develop expertise or competency in a certain skill or function. - Repetitive and specialized nature of jobs helps in quick and efficient training of new resources. Disadvantages: - Extreme specialization resulting in tedious repetitive work can lead to low job satisfaction - Due to high levels of job specialization, firms are unable to prevent turnover.
What is Culture?
The way individuals in an organization uniquely and collectively think, feel and act. - Provides employees with a road map and a set of rules for how work gets done and how people interact in the firm - Responds to humans' basic need for stability, consistency, and meaning - Needs to be externally relevant to ensure that the firm operates successfully as its environment changes.
Network Form
Uses cross-functional teams and technology to coordinate the work of geographically-dispersed work groups. Emphasis is on the informal structure of the firm: - Informal relationships between clusters of workers and cross-functional teams dominate the action of the firm Allows firms to quickly to adapt to changes in the marketplace or respond to a competitor's action.
Managing a Multigenerational Workforce: Flexible Work Options
Variable Work Schedule Flexible Work Schedule Job Sharing Telecommuting
Separations
Voluntary: - Changing jobs/firms? - Retirement Involuntary: - Termination - Lay-offs 1. Downsizing: A process designed to reduce inefficiency and waste that builds up in an organization over time in an effort to be more competitive 2. Survivor Syndrome: A condition that can occur when certain employees who survive a downsizing become narrow-minded, self-absorbed, resentful, or risk-averse
Labor Relations
Wagner Act of 1935 - Allowed employees the right to organize and fight for better: - Wages - Working conditions - Job security Taft-Hartley Act of 1947 - Reined in some of the powers of the unions Types of unions - Industrial - Craft
Tough-Guy, Macho Culture
Where can you find this culture? - Entertainment industry, sports teams and advertising - Individuals who enjoy risk and who get quick feedback on their decisions What is Special about this culture? - All-or-nothing culture ----Successful employees are the ones who enjoy excitement and work very hard to be stars. ----All others are second class citizens - Teamwork is not highly valued - Difficult environment for people who blossom slowly. ----Higher turnover, which impedes efforts build a cohesive culture.
Process Culture
Where can you find this culture? - Large retailers, banks, insurances companies, and government organizations - No single transaction has much impact on the organization's success and it takes years to find out whether a decision was good or bad. What is special about the culture? - Employees find it very difficult to measure what they do so they focus instead on how they do things - High value on technical excellence - Pay attention to getting the process and details right - Not always measuring the actual outcome.
Bet-Your-Company Culture
Where can you find this culture? - Pharmaceutical, Oil and Gas companies, Architectural Firms and organizations in other large, capital-intensive industries. - Decisions are high risk but employees may wait years before they know whether their actions actually paid off. What is special about the culture? - Long-term focused - Collective belief in the need to plan, prepare, and perform due diligence at all stages of decision making.
Work Hard---Play Hard Culture
Where can you find this culture? - Sales (among others) - Employees themselves take few risks; - Feedback on how well they are performing is almost immediate - Employees have high levels of energy and stay upbeat. - Heroes in such cultures are high volume salespeople What is Special about the Culture? - Recognition that one person alone cannot make the company - Team effort and everyone is driven to excel. - Contests among employees are common here, as they drive everyone to reach new heights
(No) Control
Zappos is going holacratic: no job titles, no managers, no hierarchy.
Four Perspectives of the Balanced Scorecard
1. Financial Perspective 2. Customer Perspective 3. Learning and Growth Perspective 4. Internal Business Process Perspective
Various Customer Metrics
1. Account Share: This is a share of the target customer's wallet. Consumers spend money on many different items spanning several industries so support their needs. Some companies find it valuable to monitor the amount customers spend on their products relative to all other products. 2. Customer Retention: An easy way to maintain or increase market share is to retain existing customers. Many companies also track customer loyalty by measuring the percentage growth of business with existing customers. 3. New Customer Acquisition: This metric is measured 2 ways: the number of new customers and the total sales to new customers 4. Customer Satisfaction: This is one of the most important metrics, but also the most subjective and qualitative. Customer satisfaction is often measured with feedback surveys. Recent research has shown that customers perform repeat purchases only when they rate their experience as extremely satisfying. 5. Customer Profitability: Although it is good to have happy customers, they should also be profitable for business. Newly acquired customers can seem unprofitable due to high acquisition costs, but measures of lifetime profitability can be used to decide whether to acquire a specific set of customers.
Levels of Organizational Culture
1. Artifacts: Visible organizational structures, processes, and languages Examples: Buildings, Dress code, offices 2. Beliefs and Values: The meanings that members of an organization attach to artifacts 3. 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
Managing a Multigenerational Workforce
1. Baby Boomers: - High quality colleagues - Flexibility - Access to new challenges - Recognition from one's company or boss - Intellectually stimulating workplace - Autonomy - Opportunity to give back to the world 2. Generation Y: - High-quality colleagues - Flexibility - Access to new challenges - Recognition from one's company or boss - Prospects for advancement - Steady rate of advancement
Step 2: Setting Performance Targets
1. Benchmarking: Process of collecting data from the industry's best players and using their numbers as a goal or guideline for evaluating company performance 2. Budgeting Process: The process for allocating financial resources, planning forecasts, and measuring expected quantitative and qualitative outcomes of a firm.
Perspectives of the Balanced Scorecard - Business Process and Learning & Growth Perspectives
1. Business Process Perspective: Focuses on measurements that will improve a company's ability to serve its customers and deliver value propositions to its customers - Is the company meeting product quality standards in an efficient and cost-effective way? - Are customer service calls handled expeditiously? With the business process perspective, managers identify the most important business processes to achieve the best results 2. Learning and Growth Perspective: Identifies infrastructure and skills needed to carry out business processes, interact with customers, and achieve long-term financial growth. Also helps identify gaps in capabilities or resources. - Example: Managers often measure employee satisfaction productivity, and retention to better understand employee issues or concerns The key to this perspective is fostering an environment that is conductive to learning.
Decision Rights 2
1. Centralized Organization: An organizational structure characterized by formal structures that control employee behavior by concentrating decisions in a top-down, hierarchical fashion 2. Decentralized Organization An organizational structure where key decisions are made at all levels of the firm, not mandated from the top
Building Organizational Commitment
1. Compliance: Commitment to the firm based on a fair exchange, such as a pay for services 2. Identification: Commitment to the firm based on a sense of belonging 3. Internalization: Commitment to the firm based on an alignment between the firm's values and the individual's values
Perspectives of the Balanced Scorecard - Customer Perspective
1. Customer Perspective: - This framework that links key customer based metrics such as market share and retention to the financial performance of a firm 2. Value Propositions: - Quantitative and qualitative things that customers value most - Akin to sustainable competitive advantage
Functions of an Organization
1. Defines the roles of the labor force 2. Coordinates activities between members 3. Identifies the borders of the firm and external relationships.
Extended Meanings of Employment Discrimination
1. Disparate (unequal) treatment: - Intentionally using race, color, religion, sex, or national origin as a basis for treating people differently. 2. Disparate (adverse) impact: - An employer's practice results in fewer minorities being included in the outcome of testing, hiring, or promotion practices than would be expected by numerical proportion. 3. Four-Fifths (80%) rule: - If a member of a minority group does not have a success rate at least 80 percent that of the majority group, the practice may be considered to have adverse impact.
Major U.S Laws Affecting Human Capital
1. Equal Pay Act (1963): - Men and women who do the same job in the same organization should receive the same pay 2. Civil Rights Act Title VII (1964): - Prohibits discrimination based on sex, race, religion, or national origin 3. Age Discrimination of Employment Act (ADEA) (1967): - Protects individuals between ages 40 and 65 from discrimination in employment 4. Occupational Safety and Health Act (1970): - Created minimum standards of safety in the workplace 5. Vocational Rehabilitation Act (1973): - Prohibited discrimination against people with disabilities, but only applied to the federal government 6. Americans with Disabilities Act (1990): - Prohibits discrimination against people with disabilities. The world's first civil rights law for people with disabilities 7. Civil Rights Act (1991): - Amended the original Civil Rights Act to make it easier for employees to win in their discrimination lawsuits 8. Family and Medical Leave Act (1996): - Entitles employees to take unpaid leave of absence for family and medical reasons without losing their job.
How Does Culture Affect Performance?
A strong culture: - Can lead to better levels of performance, higher financial metrics, and distinctive competitive advantage - Promotes ethical guidelines that define acceptable and unacceptable behavior, helping the organization require less coordination and monitoring - Clarifies roles by being explicit about what is expected in an organization Subcultures: Cultures that form around geographic or organizational units in a company.
How Does Culture Affect Performance?
A strong culture: -Can lead to better levels of performance, higher financial metrics, and distinctive competitive advantage - Promotes ethical guidelines that define acceptable and unacceptable behavior, helping the organization require less coordination and monitoring - Clarifies roles by being explicit about that is expected in an organization Subcultures: Cultures that form around geographic or organizational units in a company.
Step 1: Identifying Measures
In business, only 2 things can be observed, measured, and monitored: behavior and outputs 1. Behavior: The actions and decisions of individual employees 2. Outputs: The products and/or services that an organization produces The Balanced Scorecard - The method created to help businesses translate strategy into action by identifying the most critical measures to drive business success and linking long-term strategic goals with short-term operational actions. Primary Advantage of the Balance Scorecard: - Helps managers create a set of quantitative and qualitative measurements that are related and mutually reinforcing, known as cause-effect relationships -Also known as Key Performance Indicators (KPIs): ----Measurable value that demonstrates how effectively a company is achieving key business objectives.
Recruiting Talent
Internal - Finding qualified applicants 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 External - Finding qualified applicants outside the firm - Higher compensation offered to external recruits may cause equity issues within a firm Realistic job preview: When an organization provides information to job candidates that highlights the most important conditions of a job including its positive and negative aspects
Strategic Change and Culture
Internal Integration -How work is accomplished in a firm External Adaptation -How environmental changes impact a firm's strategy
Strategic Objectives
Is affected by the type of competitive strategy that a company pursues -Cost-Leadership strategy - HR practices should focus on: ----Cost-effectively increasing productivity ----For example: part-time employees, subcontractors, flexible job assignments, simplified tasks to reduce training time -Differentiation Strategy - HR practices should include: ----Constant feedback system ----Moderate Collaboration Across Functions ----Employee Participation in decision making -Focused innovation Strategy - HR practices should allow for: ----Greater autonomy and room for experimentation ----Ample opportunities for development and training.
Human Resource Planning
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 the workplace - Self-administered questionnaires 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 Requires assessment of the business environment to understand the availability of workers with specific skill levels
Stage of Growth: Matching Human Resource Practices to Organizational Stage of Growth
Stage 1 - Initiation: Loose, informal management; Basic salary and benefits; Flexible job definitions Stage 2 - Functional Growth: Responding to business needs in compensation and benefits; Add training and development programs; Recruit specialists Stage 3 - Controlled Growth: Formalized control measurements and goals; Routine performance appraisals; More formal control mechanisms; More well-defined job roles and functions Stage 4 - Functional Integration: Long-range planning; Generate interdisciplinary training programs; Succession planning; More formal planning and hiring cycles. Stage 5 - Strategic Integration HR fully integrated with strategic direction; Long-range planning; Training and development focused on strategic issues
HP Functional Organizational Structure
Started out with 1 product - Oscillator--sold to Walt Disney Company grew and organized as a functional organization with: - Sales - Manufacturing - Finance - Human Resources
Hewlett Packard and Wozniack
Steven Wozniack decided to work with Steven Jobs and create Apple Computer instead.
Role of Teams
Teams directly impact culture by the manner in which they: - Encounter big problems - Solve these problems - Perceive the effects of their solutions A course of action prescribed by a found has to be tried and tested by employees before it becomes an integral part of an organization's culture.
Organizational Design
The formal system, levers, and decisions an organization adopts or employs in pursuit of its strategy. Encompasses several important decisions: - 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. Examples: 1. Firms pursuing cost leadership strategy will most likely make a series of organizational design decisions that emphasize operational efficiency, cost reduction, and internal integration or alignment. 2. Companies that seek to pursue a differentiation strategy will make different organizational design decisions, including ones that emphasize innovation, flexibility, creativity, and speed.
The Control Cycle
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. 1. Identify Measures 2. Set Targets 3. Measure Results 4. Take Corrective Action
Organizational Structure
The pattern of organizational roles, relationships, and procedures that enable coordinated action among employees. 1. Functional Structure: Organizes a firm in terms of the main activities that need to be performed, such as production, marketing, sales, and accounting. 2. Divisional Structure: Groups diverse functions into separate divisions 3. Matrix Structure: Both divisional and functional managers have equal authority in the organization 4. Network Structure: Knowledge workers are organized to work as individual contributors, or to be a part of a work cluster that provides a certain expertise for the organization.
Mutual Adaptation
The process by which firms impact the nature of their overarching industrial environment and adapt their organization in response to evolving contextual factors - Critically important in industries where change is a constant, such as technology and fashion Structure follows strategy, HP had been adapting and re-organizing for the last 20-40 years, still in process----no end stage.
Management by Objectives (MBO)
The process of managing employees by outlining a series of specific objectives or milestones that they are expected to meet in a time period Goal setting: - Defining objectives or targets for individual or firm performance Participation: - Traditional Approach: Top-down communication and setting of goals/objectives - Modern View: Using bottom-up approach to generate commitment to targeted objectives
