Midterm 1 is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Organizations Are: 1. Social Entities: People communicating and interacting 2. Goal Oriented: The organization exists for some kind of purpose 3. Purposeful coordination of activity: Use of processes, structures, technologies, etc. to accomplish goals. 4. Open System: Affected by and affects external environment. Structural Dimensions: 1. Formalization: - Codified rules and procedures. - Example: formal performance evaluation/promotion procedures. 2. Specialization: - “Division of Labor” Key to industrial revolution, but challenges with a high degree of specialization. - Example: automobile assembly line 3. Hierarchy of Authority: - Reporting lines (organization chart) - Includes span of control- the number of direct reports 4. Complexity - Vertical (levels in hierarchy) - Horizontal (departments) - Spatial (physical locations) 5. Centralization - Centralized organizations: decision authority at the top - Decentralized organizations: decision authority at lower levels of the hierarchy sh Th Contingency Factors 1. Organization Size: - Start up vs. maturing company - Increased formalization from need to manage more complex and wide-ranging processes 2. Organizational Technology - What is the main process used to produce the organization's “product” or meet its purpose 3. The Environment - Public vs private; change is fast-paced vs slow-paced; highly regulated vs. less regulated; stability of suppliers and customers; etc. 4. Goals and strategy - Purpose of organization (mission statement). - Strategy for achieving those associated goals. - Example: competing on price vs. quality 5. Organization Culture - Shared understandings of what particular behaviors and symbols mean, and common norms regarding what constitutes appropriate, ethical behavior. This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ (informal but powerful) Mechanistic vs Organic Designs: Mechanistic: - Organic: Formalized processes and rules Centralized Hierarchical Highly specialized tasks Communication: information flows are vertical - informal,rather than formal rules Decentralized Less hierarchical, more team-based Less specialized (roles rather than tasks) Communication: information flows are horizontal. sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Contingency Factors That Work Best For Each Typical Contingency Factor for Mechanistic: - Large Size - Efficiency Strategy - Stable Environment - Rigid Culture - Manufacturing Technology TypicaL Contingency Factors For Organic Designs - Small Size - Innovation Strategy - Changing Environment - Adaptive culture - Service Technology Cooperation - What is “rational” for the individual, department, or sub-group, may not be best for the organization (social dilemma) - The organization system should encourage pursuit of organizational goals through norms of trust, good communication, long term perspective, and proper incentives. - Example: information sharing across departments (critical to innovation). - However, cooperation is not always a good thing.. Ethics - Cooperation can sometimes be unethical (e.g. corruption or collusion). - Dangers of “groupthink”- emphasis on group conformity over individual beliefs or morals. - Organizations where cooperation and conformity are always expected may be prone to unethical behaviors: (keeping quiet regarding product defects or environmental damage; accounting fraud; mistreatment of employees; predatory sales tactics, etc) - Importance of having an organization's culture of high ethical standards, with consideration of all stakeholder groups, and where diversity of individual perspectives and beliefs are encouraged and valued. Strategic Intent: means that all the organization’s energies and resources are directed toward a focused, unifying, and compelling overall goal. - Examples: Microsoft saying they will put a computer on every desk of every home; Coke This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m saying they will put one in arms reach of every consumer in the world. To formulate strategic intent, organizations first evaluate: 1. The external environment for market opportunities and obstacles. 2. The internal strengths and weaknesses of the organization. →use this information in formulating the strategic intent of the organizations The aspects of strategic intent are: The mission statement, core competence, and competitive advantage. Mission Statement (or official goals)- the purpose of the organization. - Establishes legitimacy with stakeholders such as employees, investors, customers, governments, and others. Core Competence- an organization’s distinguishing capabilities. (something the organization does especially well). - Apple: product design - Zara: “Fast Fashion” Sustainable competitive advantage- an organization’s ability to succeed over the long term relative to competitors. - Difficult to see or imitate organizational processes→sustainability. Operating Goals Operating goals represent the specific goals that those in the company or departments strive to achieve in pursuit of the organization's mission. - Help motivate individuals and departments (attainable and oftentimes attached to rewards or recognition) - Provide more specific guidelines for decision making across the organization (and tailored to specific conditions of each department or division). - Reduce uncertainty regarding performance expectations. - Create boundaries in organizations, providing clarity in individual or departmental responsibilities. Mission statement on the other hand is an “umbrella” statement that primarily provides meaning, purpose, and organizational legitimacy. Types of Operating Goals - Performance: profitability(e.g. net-income), revenue growth, volume etc. - Market: To measure relative success compared to others in the industry (market share). - Resources: Measures to gauge the success of resource acquisitions (quality, cost, etc). - Employee development and welfare: Training, growth in skills, employee satisfaction. - Productivity: The level of organizational output given a certain amount of resources. - Innovation and Change: Product development, number of patents, etc. Strategy- is how an organization plans to attain its mission and goals. Michael Porter’s Competitive Strategies: 1. Differentiation- create new products and services different from competitors (price less of a concern) - Focus on innovation and creating strong brand loyalty. - Costly approach in terms of investment required (R&D advertising) 2. Low-Cost Leadership- Pursue efficiency strategy to compete on price. - Gain market share by offering given product at lower price. This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m - Small margins, so want high volumes Miles And Snow’s Typology: Managers seek to formulate strategies that will be congruent with the external environment. 1. Prospector- Organizations primarily seeks to create new products and markets through investing in innovation (e.g. Facebook, Tesla) (taking risks) 2. Defender- Wants stability over everything, and pursues a lower risk, high efficiency strategy to defend position. (stability) 3. Analyzer- mix of the prospector and defender: organization has core business but also seeks to innovate simultaneously. 4. Reactor- Less of a coherent strategy. Organization reacts to changes in the marketplace. Efficiency vs Effectiveness What’s the difference? - Efficiency is about reaching an identifiable measurable goal while spending the least amount of resources possible. - Effectiveness is whether the organization is achieving its mission. Importance of goals appropriately aligned with purpose/mission: - Efficiently achieving goals misaligned with organizations purpose is NOT effectiveness - Challenge of determining efficiency when dealing with “home-run” businesses, radical innovation, healthcare, artistic organizations. Effectiveness is not an objective construct, but is a social construct - Disagreement among stakeholders (management, employees, community, stockholders, customers,etc.) over appropriate goals and measurements. Competing Values Model Organizations can have competing interests and perspectives both internally and externally. Competing Values Model: considers multiple parts and goals of organizations simultaneously. Two Dimensions: Focus and Structure Competing values organizations: Focus (internal vs. External): - Internal Focus: well-being and development of employees - External Focus: perceived effectiveness and legitimacy of organizations to those in external environment. Structure (stability vs. Flexibility) - Stability- control and efficiency - Flexibility- emphasis on change The Model (4 parts) 1. Open systems emphasis: - External focus - Flexible Structure 2. Rational goal emphasis: - External focus - Control structure - Organization seeks efficiency and profit. -sub goals: clearly developed and articulated plans and goals. This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m 3. Human Relations Emphasis: - Internal focus - Flexible Structure -Organization seeks to develop human resources. Sub goals: job satisfaction, healthy culture, employee training 4. Internal process Emphasis: - Internal focus - Control structure - Organization seeks to maintain stability. -sub goals: efficient communication and information management. Vertical vs. Horizontal Linkages Vertical Linkages: For control - Hierarchy (vertical lines on organization chart) - Rules (procedures and guidelines) - Vertical information systems (e.g., electronic reports moving up and down the chain of command) Horizontal Linkages: For collaboration - Information systems (e.g. medical records) - Liaison Roles: to connect departments - Task force: committee formed to solve a particular problem involving multiple departments. - Full-time integrator (brand manager, project manager, etc) - The product manager works with people in different functional areas (marketing, engineering, etc.) to develop and manage a product. - Teams: Permanent groups that span different functional areas. - Relational Coordination: a culture of collaboration (lots of trust) Design Approaches Functional Structure - Functional: Grouped by functional expertise (one finance department, one marketing department, one HR department, one R&D department) - Centralizes decision making Divisional Structure Divisional: - Organizations structured based around products or business. - Each division has their own functional departments - Decentralizes decision making Geographical Structure - Organized around customer geography - Like divisional form, each geographic division has own functional department. - Decentralizes decision making to geographic regions. - Overall, similar to divisional structure, except organized by location rather than by product (the strengths and weakness regarding divisional structure apply here as well, but with geography.) Matrix Structure This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Matrix Structure: - Organized around a product and function simultaneously. - Employees formally report to functional heads (e.g. head of marketing) and product manager at the same time - Used when need lots of coordination across function but also need to develop functional expertise Horizontal Structure - Organized by horizontal work process (e.g. customer service process). - Everyone is on a team that is focused on a specific process (without functional boundaries) - EXP: customer service at ford Virtual Networks and Outsourcing - Outsourcing: ton contract with an external organization for a particular function/service (outsourcing HR, suppliers, etc.) - Virtual network structure: outsource most activities, with organization serving more as a coordinator. Hybrid Structures Most organizations use multiple design elements - For example, a company may outsource some services like manufacturing; use divisional structure for the organization's main products, but keeps some functional departments (like marketing or HR) centralized; all the while using business process reengineering ( horizontal structure) for some customer service processes. Organizational Domain: the areas of the environment most critical to the organization Environmental Sectors: Task v General Environment General Environment: sectors that will affect the organization, but not necessarily directly. - Government sector (regulation) - Natural sector (natural resources, sustainability concerns) - Sociocultural sector (cultural trends) - Economic conditions sector (cultural trends) - Technology Sector (social media, etc) - Financial resources Sector (loans) Sources of environmental uncertainty (stable-unstable and simple-complex dimensions) Simple-complex dimensions: How diverse are environmental sectors on which the organization depends. - For instance, is the organization simultaneously concerned with regulation, technology, international issues, economic conditions, etc Lawrence and Lorsch: Differentiation and Integration - Differentiation: the extent to which an organization’s departments differ in terms of goal orientation, culture, and formalization. More environmental uncertainty→ organizational differentiation Integration: The extent of collaboration and coordination across departments (becomes difficult as differentiation increases). More differentiation → Need more integrators (brand managers, liaison roles, etc.) Managing the External Environment This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Mergers and Acquisitions: - Can reduce environmental uncertainty, increase bargaining power, economies of scale, etc. Joint Ventures (JVs) and Strategic Partnerships - Joint venture: form a new company jointly owned by other companies (ex; warner brothers and china media capital create flagship entertainment group WB = 49% CMC= 51%) - Strategic partnerships can also include licensing deals or the sharing of resources jointly develop or integrate new products. (ex: Cisco or Apple) - Executive Recruitment: recruitment of people who have worked in important environmental sectors. (example: defense contractors) - Public Relations: presenting a favorable image of the organization (role of social media) - Changing the organization’s domain (environmental sectors). - Political Action: lobbying the government for regulatory changes. - Trade Associations: joining with other organizations (including direct competitors) to increase the industry’s legitimacy, power and influence (example: food truck associations at D.C. council meeting). Social Capital: the extent to which people and organizations can access and provide resources through their network ties. - Based upon trust and reciprocity Network Cohesion: indicates how tightly connected a group of people are to each other. Network Redundancy - Less redundancy by maintaining ties with fewer people who have diverse information. Structural holes: Connections to people who are not connected to each other Resource Dependence Theory: Examines how organizations manage dependence on external actors (other organizations) in the procurement of critical resources. Strategies: - Take an ownership stake - Joint ventures - Relationship building Resource dependence and supply chain management Collaborative Networks Organizations increasingly form collaborative relationships with one another in order to: - Share complementary assets and expertise - Enhance perceived reputation and prestige - Share risk Role of contracts, trust and equity in inter-organizational relationships. International differences in collaborative networks. Population Ecology: examines the birth, life, and death of organizations. Three stages of ecological change (from evolutionary theory): - 1. Variation- variety of organizational forms (entrepreneurship) - 2. Selection- whether the organizational form can survive in its environmental niche. - 3. Retention- Process of institutionalization, where the organizational form becomes a This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m taken-for-granted part of the environment Strategies: Generalist vs. Specialist Structural inertia: difficult to change organization structure and strategy due to long term investment (financial,emotional, cultural) in established way of operating. Institutionalism The institutional perspective looks at how organizations respond to cultural expectations in the environment (and end up looking similar to one another). Legitimacy- whether an organization and its actions are viewed as proper and appropriate. Institution similarities from: - Mimetic forces (following the lead of others; e.g., management fads) - Normative forces (following professional standards; e.g., government contractors) Motivators for international expansion Growth- international expansion can be critical to a company’s growth Economies of Scale- Lower average costs with increasing scale. Potential for significant economies of scale at netflix: - If costs of acquiring distribution rights and producing original content can be spread over a larger customer base Resource Acquisition - Companies may look abroad to acquire resource inputs. - An increasingly global production process Challenges Competition: - Economies of scope: Lower average costs from multiple products. → competition from Apple, Amazon, Google/youtube, Disney. Local competition - Will need to compete (as well as create strategic partnerships) with local companies However, Netflix appears to have have first-mover advantage. - Brand recognition, recurring billing, etc. → customer loyalty → can influence and shape, not just adapt to the environment. Market Access and local legitimacy Infrastructure limitations - Differing payment systems (credit card, bank transfers) - Mobile vs. home broadband (india) Cultural differences - In france, initial resistance from local film producers - In indonesia, concerns over appropriateness of content. Regulatory and governmental challenges - Netflix has suspended effort to enter China (but will license content). In europe, effort to impose taxes and quotas to support local content. International strategy Globalization (standardization) vs. Multidomestic (tailored to local needs) Manufacturing Technology - Joan woodward’s work on tech and organization structure: This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Small batch and unit production → organic structure Large batch and mass production → mechanistic structure Continuous-process production → organic structures The smart Factory and Lean Manufacturing Smart Factory: advanced technology increasingly critical to day-to-day operations. Lean Manufacturing: uses a teamwork approach and highly trained workforce, coupled with advanced technologies, to produce a more efficient and flexible manufacturing process, and ultimately higher quality products. Organizational culture of empowerment - Continuous innovation - Emphasis on the customer - Organic Design → Mass customization sh Th Service Technology Eight design elements: - Intangible outputs - Production and consumption of service are simultaneous - Labor intensive (often knowledge based) - Technical core employees interact directly with customer - Importance of culture, cognition, and emotion - Perceived quality - Response time - Location (convenience and practicality for customers) Service technology → fewer boundary roles, higher decentralization, and less formalization Workflow Interdependence 1. Pooled Interdependence: - Low interdepence - Use of standardized rules and procedures (little coordination needed) 2. Sequential interdependence: - Outputs of one department become inputs of another (can't do your job until someone else has done their job) 3. Reciprocal interdependence - Inputs and outputs go back and forth between departments, so that they are all mutually dependent upon one another. - Tons of coordination needed, through mutual adjustment. This study source was downloaded by 100000776112845 from CourseHero.com on 09-29-2021 09:38:25 GMT -05:00 https://www.coursehero.com/file/48499684/BUS-161B-midterm-study-guidedocx/ Powered by TCPDF (www.tcpdf.org)
