Organizational Change and Design Exam 1

Functional structure

Activities are grouped together by common function from the bottom to the top of the organization

Task Forces

As a temporary committee composed of representatives from each department affected by a problem, the group links several departments to solve common problems. The task force is disbanded after tasks are accomplished.

Symptoms of structural deficiency

- Decision making is delayed or lacking quality - Organization cannot meet changing needs - Employee performance declines, needs are not meet - Too much conflict

Framework for the book

- Four levels of analysis characterize organizations - Organizational behavior is the micro approach - Organization theory and design is the macro examination - Organization design is concerned with the big picture of the organization and its major departments

Organizational Design Alternatives

- Required work activities - Reporting relationships - Departmental grouping options

Conditions for Matrix:

- Share resources across the organization - Two or more critical outputs required: products and technical knowledge - Environment is complex and uncertain

Importance of Organizations

-Organizations are a means to an end -The corporation has played a significant role in the last 100 years -Produce goods and services efficiently -Facilitate innovation -Adapt to and influence a changing environment -Create value for owners, customers, and employees -Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees

Organizational Goal

A desired state of affairs that the organization attempts to reach

Niche

A domain of unique environmental resources and needs sufficient to support an organization.

Strategy

A plan for interacting with the competitive environment

Administrative Principles

A subfield of the classical management perspective that focuses on the total organization rather than the individual worker, introduced by Fayol

Organizational ecosystems

A system formed by the interaction of a community of organizations and their environment

Q: The best way for an organization to cope with a complex environment is to develop a complex structure (rather than keep it simple and uncomplicated).

Agree. As an organization's environment becomes more complex, the organization has to add jobs, departments, and boundary spanning roles to cope with all the elements in the environment.

Q: A CEO's top priority is to make sure the organization is designed correctly.

Agree. Top managers have many responsibilities, but one of the most important is making sure the organization is designed correctly.

Structural alignment

Aligns structure with organizational goals

Efficiency

Amount of resources used to achieve the organization's goals

Organizational form

An organization's specific technology, structure, products, goals, and personnel, which can be selected or rejected by the environment

Virtual network structure

An organizational structure in which the organization subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters organization. - Outsourcing

Matrix structure

An organizational structure that simultaneously groups people and resources by function and by product.

Adding Positions and Departments

As the complexity in the external environment increases, so does the number of positions and departments with the organization, which in turn increases internal complexity.

Stakeholder Approach

Balancing the needs of groups in and outside of the organization that has a stake in the organization's performance

Analyzer

Between the prospector and defender by efficiently maintaining a stable business for current product lines, while at the same time innovating to develop new product lines.

Buffering roles

Can absorb uncertainty from the environment by protecting the technical core from environmental changes and helping it function efficiently.

Mechanistic organization

Characterized by machine like standard rules and procedures with clear authority

Collaborative Networks

Companies join together to become more competitive and to share scarce resources.

Information Systems

Cross functional information systems enable employees to routinely exchange information.

Hierarchy of authority

Describes who reports to whom and the span of control

Organic organization

Design of organization is looser, free flowing, and adaptive

Q: An organization can be understood primarily by understanding the people who make it up.

Disagree. An organization has distinct characteristics that are independent of the nature of the people who make it up. All the people could be replaced over time while an organization's structural and contextual dimensions would remain similar.

Q: The best business strategy is to make products and services as distinctive as possible to gain an edge in the marketplace.

Disagree. Differentiation, making the company's products or services distinctive from others in the market, is one effective strategic approach.

Q: The primary role of managers in business organizations is to achieve maximum efficiency.

Disagree. Efficiency is important, but organizations must respond to a variety of stakeholders, who may want different things from the organization. Managers strive for both efficiency and effectiveness in trying to meet the needs and interests of stakeholders. Effectiveness is often considered more important than efficiency.

Q: Managers of business organizations should not get involved in political activities.

Disagree. Smart business managers get involved in lobbying and other political activities to try to make sure the consequences of new laws and regulations are mostly positive for their own firms.

Q: Organizations should strive to be as independent and self sufficient as possible so that their managers aren't put in the position of "dancing to someone else's tune."

Disagree. Trying to be separate and independent is the old way of thinking.

Divisional structure

Divisions organized according to products, services, production groups

Bureaucracy

Effective approach for the needs of the Industrial Age, calling for clearly defined authority and responsibility, formal record keeping, and uniform application of standard rules. It remained the primary approach to organization design through the 1980s.

Matrix structure largest weakness

Employees have two bosses with conflicting demands

The internal process approach

Evaluates effectiveness by examining internal organizational health and economic efficiency

The resource based approach

Evaluates the ability of the organization to obtain valued resources from the environment.

Rules and Plans

For repetitious problems and decisions, a rule or procedure can be established so employees know how to respond without communicating on each separate issue.

Structural Dimensions

Formalization, specialization, hierarchy of authority, complexity, centralization

Scientific Management

Frederick Taylor's term for the application of scientific principles to the operation of a business

Current Organizational Design Challenges

Globalization Intense Competition Ethics and Green Movement Speed and Responsiveness Social Business and Big Data

Open System Emphasis

Growth and resource acquisition

Human relations emphasis

Human resource development, cohesion, morale

Is competition dead?

In the sense that a single company competing for supremacy with other stand-alone businesses no longer exists, competition is dead. However, a new form of competition is intensifying. Companies find that they must coevolve with others in the ecosystem.

Organization Environment

Includes all the factors that exist outside of the boundary of the organization and have the potential to affect all or part of the organization

Low cost leadership

Increase market share by keeping costs low compared to competitors (Walmart)

Organizations need the right fit between _____ and the________.

Internal structure, External environment

Prospector

Involves innovation, taking risks, seeking out new opportunities and growth.

Defender

Involves retrenchment, beyond just stability, by seeking to keep current customers without innovation or growth.

Uncertainty

Lack of sufficient information about environmental factors

Hawthorne Studies

Led to a revolution in worker treatment from findings that positive treatment improved motivation and productivity.

Boundary spanning roles

Link to and coordinate the organization with key elements in the external environment

Strategy impacts internal organization characteristics

Managers must design the organization to support the firm's competitive strategy

Miles and Snow Typology

Managers should seek to formulate strategy that matches the demands of the external environment. 4 strategies include: - Prospector - Defender - Analyzer - Reactor

Operative Goals

Operative goals designate the ends sought through operating procedures and describe specific measurable outcomes in the short run. These goals concern overall performance, resource, market, employee development, productivity, and innovation and change.

Contigency Theory

Means that one thing depends upon other things, and for organizations to be effective, there must be a fit between the structure and the conditions in the external environment. There is not one best way to manage

The strategic constituents approach

Measures effectiveness by focusing on the satisfaction of key stakeholders, those who are critical to the organization's ability to survive and thrive.

Importance of goals

Mission or official goals provide legitimacy while operating goals provide employee direction

Porter's Five Forces

Model developed by strategy expert Michael Porter that identifies five competitive forces that influence planning strategies.

Complexity

Number and dissimilarity of external elements

Liasion Roles

One or more team members are responsible for regularly communicating with other teams and coordinating the teams' activities as needed

Strategic Intent

Organization's energies and resources are directed toward a focused, unifying, and compelling goal. Consist of the mission, the competitive advantage, and the core competencies (something the org does well in comparison to competitors)

Organization

Organizations are social entities that are goal directed, with deliberately structured and coordinated activity systems, and with a link to the external environment. Open System that obtains inputs, adds value, and discharges products and services back to the environment.

Resource dependance

Organizations depend on the environment but strive to acquire control over resources in order to minimize their dependence.

Resource Dependence

Organizations minimize their dependence on other organizations for the supply of resources Organizations succeed by striving for autonomy Organizations alter interdependent relationships through ownership, contracts, and joint ventures

Geographic structure

Organizing to meet the needs of users/customers by geography

Rational goal emphasis

Productivity, efficiency, profit

Horizontal information systems

Refers to communication and coordination horizontally across organizational departments.

Relational coordination

Refers to frequent, timely, problem-solving communication carried out through relationships of shared goals, shared knowledge, and mutual respect

Centralization

Refers to the hierarchical level that has the authority to make decisions

Complexity

Refers to the number of distinct departments or activities within the organization

Vertical Information Systems

Reports, computer systems, and written information

Interorganizational relationships

Resource transactions, flows, and linkages that occur among two organizations

Reactor

Respond in an ad hoc manner to environmental threats and opportunities, without a long-range plan.

Task Environment

Sector that the organization interacts with directly Examples are: Industry sector, raw materials sector, market sector, human resources sector, international sector

General Environment

Sectors that may not have a direct impact on the daily operations of the firm but that influence the industry or economy in general ways that in turn indirectly influence the organization Examples are: Government sector, natural sector, sociological sector, economic conditions, technology sector, and the financial resources sector

Horizontal linkages

Shared tasks/empowerment, relaxed hierarchy/few rules, horizontal/face-to-face, communication, many teams and task forces, informal / decentralized decision making

Contigency Factors

Size, organizational technology, environment, goals and strategy, culture

Vertical linkages

Specialized tasks, hierarchy of authority, many rules, vertical communication and reporting systems, few teams, task forces, or integrators, centralized decision making

Internal process emphasis

Stability and equilibrium

Sectors

Subdivisions of the external environment that contain similar elements.

Teams

Teams can be the strongest horizontal linkage mechanism. Teams are permanent task forces, often used in conjunction with a full-time integrator.

Horizontal structure

The horizontal structure organizes employees around core processes by bringing together people who work on a common process so they can easily communicate and coordinate their efforts.

Formalization

The amount of written documentation in the organization

Population ecology

The changing environment determines which organizations survive or fail. When rapid change occurs, old organizations are likely to decline or fail, and new organizations emerge that are better suited to the needs of the environment..

Environmental domain

The chosen territory of action defining the niche and external sectors with which the organization will interact to accomplish its goals.

Effectiveness

The degree to which an organization achieves its goals

Specialization

The degree to which organizational tasks are subdivided into separate jobs

Differentiation

The differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments

4 types of measuring effectiveness

The goal approach The resource based approach Internal process approach The strategic constituents approach

The goal approach

The goal approach measures effectiveness by evaluating the extent to which output goals are achieved.

Integration

The quality of collaboration between departments

Information sharing perspective on structure

The structure must fit information requirements of the organization so people have neither too little information nor too much irrelevant information.

Hierarchical referral

The vertical lines which identify the chain of command

Differentiation strategy

To distinguish products or services from others in the industry (Apple)

Integrated Effectiveness Model

Tries to balance concern with various parts of the organization

Full-time integrator

Usually with a title such as product manager, project manager, or brand manager, this full-time position outside the affected departments is created to achieve coordination between two or more departments.

Vertical Information Sharing

Vertical linkages are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization.

Dynamism

Whether the organization operates in a stable or unstable environment