MGMT 3000/3001: Exam 2

Characteristics of Mechanistic Organization

- High degree of job standardization - High degree of job specialization - Hierarchal leadership with clear lines of authority - Information communicated from superior to employee - Employees encouraged to develop job-specific knowledge within their narrow area of specialization

Acquiring human capital

- Job analysis 1. human resource planning 2. recruiting talent 3. selecting talent

Characteristics of Organic Organization

- Low degree of job specialization - Low degree of job standardization - Loose definitions of roles and responsibilities - Less hierarchal relationship with less emphasis on lines of authority - Information communicated more laterally, information and advice over top-down orders - Encouraged to develop knowledge outside their area of specialization

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

What factors in the external environment instigate organizational change?

1. Proliferation of technology and disruptive innovation (ex. AI) 2. External forces (ex. Pandemic, armed conflict) 3. Changing labor market (ex. Great Resignation, remote working, unionization)

Benefits of benchmarking

1. Reveals best practices so that they can be analyzed, adopted, and implemented throughout industry 2. Stimulates an unbiased review of internal operations 3. Reveals problems for which others have found solutions 4. Provides objective data and targets for improvement PIERCE'S COMPANIES COMPETITIVE ADVANTAGE!!!

selecting talent

1. Review qualitative and quantitative talent 2. Structured interviews 3. Situational, behavioral, background, and job-knowledge questions Selection tests: used to measure qualities directly or indirectly related to job performance (ex. Specific ability, personality, cognitive, work sample tests)

Two essential considerations for acquiring human capital

1. Stage of growth 2. Strategic objectives

Elements of Organizational Structure

1. Work specialization - division of labor A: develop expertise or competency, quick and efficient training D: tedious repetitive work which can lead to low job satisfaction 2. Chain of command - "Who reports to whom" 3. Span of control - how many each manager manages 4. Centralization - Where decisions are formally made/decision rights 5. Centralized organization - (tied to mechanistic) 6. Decentralized organization - (tied to organic) 7. Delegation 8. Formalization - how much rules and procedures standardize actions

How to build organizational commitment

1. compliance 2. identification 3. internalization

Four perspectives of the balance scorecard

1. financial 2. customer 3. internal business process 4. learning and growth

Four determinants of culture

1. formal organization 2. people 3. leader 4. task requirements

Contextual Forces Impacting Human Capital

1. labor relations a. great resignation b. quiet quitting 2. legal environment ex. Civil rights act, VII of 1964, ADEA 1967, ADA 1990 General effect: employers cannot make employment decisions based on protected chracteristics

How does culture develop?

1. role of founders 2. role of organizational leaders 3. role of teams 4. cultural socialization

Managing human capital

1. training employees 2. developing employees a. feedback and performance reviews b. reward systems c. managing multigenerational workforce d. diversity and inclusion

feedback and performance reviews

360-degree feedback: employees conduct self-assessment of key competencies and then compare their responses to others in organization (should not be used as performance appraisal!!) Performance appraisal: the identification, measurement, and management of individual performance in organizations

Clan Approach

A type of organizational control that includes self-supervising teams that are responsible for a set of tasks (ex. Holacracy - suited to creative environments)

Two processes for implementing change

A. Top-down, directive process B. Collaborative process will be on exam

Bureaucratic approach

An extreme form of organizational control in which systems are highly formalized and are characterized by extensive rules, procedures, policies, and instructions - Close personal surveillance of superiors over subordinates

Levels of Organizational Culture

Artifacts (surface): Visible organizational structures, processes, and languages (ex. Buildings, dress code, office design) Beliefs and values (below the surface): The meanings that members of an organization attach to artifacts (ex. Whole foods values) Assumptions (farther below the surface): A behavior derived from a belief held by a group that is no longer visible, but has become deeply imbedded; unconscious beliefs (ex. How a lawyer interacts with client) !!will be on exam!!

Bona Fide Occupational Qualification (BFOQ) and Business Necessity

BFOQ: narrow exception or affirmative defense to disparate treatment discrimination - Allows employers to discriminate applications based on religion, sex, or national origin - Customer satisfaction does not justify BFOQ defense (ex. hooters work, priest) Business Necessity: narrow exception or affirmative defense to disparate impact discrimination - Exclusionary qualification or criteria are job-related and consistent necessity - requires employer to show are directly related to job performance (ex. educational requirements) !will be on exam combined together!

(II) setting performance targets

Benchmarking: process of collecting data from the industry's best players and using their numbers as a goal or guideline for evaluating company performance Budgeting process: process for allocating financial resources, planning forecasts, and measuring expected quantitative and qualitative outcomes of a firm !!!Will be on exam!!!

matrix structure

Both divisional and functional managers have equal authority in the organization

Control vs Control Loss

Control: achieved when behavior and work procedures 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...

Change Process Formula

D x M x P > Rc + Cc - Dissatisfaction - Model (vision for change) - Process for change -> - Resistance to change - Cost of Change to employee's experience

Characteristics of effective models of change

Desirable - satisfies stakeholders, motivates employees Feasible - opportunity for short-term wins, realistic stretch Relevant - contextually sensitive

What is the necessary ingredient for change process?

Dissatisfaction - needed to overcome status quo from complacency or inertia

Diversity and Inclusion

Diversity: The range of human differences Equity vs equality Equity: recognizing that each person has different circumstances and allocating resources and opportunities needed to reach an equal outcome Equality: each individual or group of people is given the same resources or opportunities. Inclusion: shift in culture and mindset of org

What do you need to do to get change implemented?

ENGAGE HEARTS AND MINDS!!

divisional structure

Groups diverse functions into separate divisions

(I) Identifying Measures

In business, ONLY TWO things can be observed, measured, and monitored: behavior and outputs How is it done? Balanced Scorecard

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 - Super complex, informal, and flexible structure

Financial KPIs

Lag Measure: after the fact measure of an organizational objective, too late to do anything about it Lead Measure: measure that management can influence, and which predicts the achievement of an organizational objective, measure of specific behavior leads to achievement

Impact of values on culture

Low agreement, low intensity = weak culture low agreement, high intensity = competing forces high agreement, low intensity = passive culture high agreement, high intensity = strong culture 1-2 questions on value of culture

Crucial moment in culture

M&A Must understand culture of acquiring firm and culture of firm being acquired - Must combine the two cultures Similarities and differences? What needs to change? How will the value of both cultures be maximized? Internal integration: how work is accomplished in firm External adaptation: how environmental changes impact a firm's strategy Ex. AT&T - Time Warner culture clash -> merger fell apart *Key point for managers to keep in mind is that much of the value of an acquired firm may be in its culture

(III) Measure Results

Measurement: the process of evaluating behaviors and outputs to see whether standards have been met or objectives have been obtained Total cycle time: want shorter time typically Ways to monitor and measure (won't rlly be on exam in detail if at all*) Ex. TQM, Six Sigma, DMAIC, ISO 9000 !!Might be control cycle question where answer is measure results!!

Functional structure

Organizes a firm in terms of the main activities that need to be performed, such as production, marketing, sales, and accounting

Origins of Organization Change

Planned: top-down, corporate strategy department Organic: emerges from individuals or teams as they innovate, solve problems, etc...

Triggers of Organization Change

Reactive: in response to known external threat or opportunity Proactive: based on some anticipatory event

managing a multigenerational workforce

Remote work differentiation? Flexible work schedule?

Cultural Socialization

Socialization: How work gets done and how individuals should interact in an organization Organizational commitment: desired end result of socialization whereby employees become committed to the organization and its goals

(IV) Take corrective action

Validating the strategy = strategic control - recalibrating or confirming a firm's strategy in light of changes in the external environment Aligning people = feedback - giving feedback to employees to correct, sustain, or improve performance

training employees

Why? 1. Orient employees on business practices 2. Teach skills with new piece of equipment 3. Educate on new products or offerings To be effective it must fit... 1. Internally with structure and culture of organization 2. Externally with strategic competitive landscape Needs assessment: determines what type of training needs to be done and who is best positioned to deliver training

developing employees

a longer term, ongoing process of training that improves an employee's personal abilities over time Why? attracts more high quality employees and keeps them more engaged in the company It is effective when... Organizations need are aligned with individual's career needs

Barcelona Restaurant Video

a restaurant in Atlanta that successfully manages their organization and epitomizes an effective control cycle 1. use financial KPIs to determine customer/table/daily revenue goals 2. use forms of technology, feedback loops, and secret shoppers to measure performance targets 3. weekly meetings with all employees to take corrective action !!will be question or two from video!!

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 McKinsey: "Agile" organization

Disparate (adverse) impact

on its face neutral policy that ends up disproportionately impacting members of protected class - EEOC Four-Fifths rule !!will be on exam!!

Organizational Change

processes and activities that organizations go through to align themselves with internal and external changes in business environment and to prepare for future potential opportunities When is it required? strategy and capabilities are out of alignment with new competitive realities

Interactive control systems

promote communication between the strategists and those implementing the strategy ensuring that performance is constantly monitored and that a business stays on course Ex. ERP or other transaction information system, financial information system, CRM ex. SalesForce's CRM system

Human resource planning

requires benchmarking compensation and benefits, assessment of business environment to understand availability of workers with specific skill levels

Organizational design

the formal systems, levers, and decisions an organization adopts or employs in pursuit of their strategy

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 !!will so so be on exam!!

Organizational structure

the pattern of roles, relationships, and procedures that enable coordinated action among employees

delegation

the process by which managers transfer decision rights to individual employees

Management by Objectives (MBO):

the process of managing employees by outlining a series of objectives or milestones that they are expected to meet in a time period Goal setting: defining objectives or targets for individual or firm performance *must set challenging but attainable goals Participation Traditional approach: top-down communication and setting of objectives Modern view: bottom-up approach to generate commitment to targeted objectives

Culture

the way individuals in an organization uniquely and collectively think, feel, and act - Roadmap and set of rules for how work gets done and how people interact in firm - Responds to humans' basic need for stability, consistency, and meaning

Organizers (Scientific Management)

those who believe that more control is warranted in organizational design to ensure that jobs are performed satisfactorily and efficiently ---> leads to mechanistic organization (ex. UGA)

training vs developing employees

training is a more short-term process that focuses on skills acquisition while developing is a long-term continuous process that focuses on growth and progress !!will be on the exam!!

Four Constructs of Organizational Structure

1. Functional structure 2. Divisional structure 3. Matrix structure (mix of functional and divisional) 4. Network structure

reward systems

Job-based pay: by nature of particular job (ex. UGA) Skill-based pay: by individual's personal skills and knowledge, not based on title *Netflix CEO Reed Hastings gives pay based on skills !Reed Hastings might be on exam!

Implementation Process of Change

1. Establish a sense of urgency 2. Form a powerful guiding coalition 3. Develop a vision 4. Communicate the new vision 5. Empower other act on the vision 6. Plan for and create short-term wins 7. Institutionalize changes in the culture

Combating resistance to change

1) Listen 2) Communicate 3) Involve 4) Train

What drives organizational design change?

1. Business-level strategy (ex. McDonalds) 2. Size and globalization (ex. Auto Brands) 3. Corporate level strategy (ex. HBO, AT&T and Warner Media) 4. Driven by Cost Cutting (ex. Exxon)

Why participate in organizational change?

1. Compete more effectively 2. Improve performance 3. Survive as competitor 4. Respond and adapt to disruptive innovation or crisis brought on by external force

Three 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

Behaviorists (human relations movement)

A more open organizational structure where roles and responsibilities are loosely defined --> leads to organic organization (ex. Zappos)

What is the Balanced Scorecard also known as?

KPIs (Key performance indicators) !!know connection for exam!!

Magnitude of Organization Change

Incremental change: small improvements on ongoing basis Transformative change: radical or disruptive, response to major competitive threat or significant change in environment

What factors in the internal environment instigate organizational change?

Inertia: inability of organizations to change as rapidly as the environment (ex. Blockbuster, Microsoft) ----> Status quo bias

recruiting talent

Internal: - knows company culture, background, and products - allows new hire a quicker and more meaningful impact in new role - demonstrates employees have access to potential career path that allows growth - organization is aware of the skills and potential of candidate External: - higher compensation can cause inequities within firm

Balanced Scorecard

The method created to help businesses translate strategy into action by identifying the most critical measures to drive business success + linking long-term strategic goals with short-term operational actions Advantage? creates quantitative and qualitative measurements known as cause-effect relationships

Learning and Growth perspective

identifies infrastructure and skills need to carry out businesses processes, interact with customers, and achieve long-term financial growth ie. Identify gaps in capabilities or resources Key: fostering environment that is conducive to learning

Disparate (unequal) treatment

intentional discrimination against protected characteristic !!will be on exam!!

Role of Teams

a. How they encounter big problems b. Solve these problems c. Perceive the effects of their solutions

Role of Organizational Leaders

a. Inspire all managers and employees to do their best b. Empower employees and managers to make independent decisions to find ways to improve operations c. Reward achievement with pay based on performance d. Reward achievement with non-pay-based perks e. Create challenging work environment f. Establish and abide by clear set of values

Role of Founders

a. Making assumptions stick b. Encouraging of innovation c. Absorb anxiety associated with risk of startup *Course of action prescribed by founder must be tried and tested by employees before it becomes integral part of organization's culture

Coordinating mechanisms of organizational design

a. Organizers -> mechanistic organization b. Behaviorists -> organic organization

What does a strong positive culture do?

a. better levels of performance b. higher financial metrics c. distinctive competitive advantage, ethical guidelines: helps the organization require less coordination and monitoring, - clarifies roles by being explicit about expectations

Job Analysis

analyzing information about specific job tasks to provide a more precise job description and define the characteristics of the ideal candidate for the position - Interviews w/ management + current jobholders, observations in workplace, self-administered questionaries

Diversity fatigue

companies fail to rethink management style and are simply "box-ticking"

Managing diversity and inclusion

creating climate in which performance is maximized while disadvantages are minimized

Silos

divisions start competing with each other and don't work together !!will be on exam!!

Performance Management

execution of managing the business

Business process perspective

focuses on measurements that will improve a company's ability to serve its customers and deliver value propositions to its customers (ex. Krispy Kreme delivering fresh donuts in stores too)

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 most, part of sustainable advantage (ex. Food, scene) *for restaurant account share is esp. important