BUS-201-202: TUTORIAL 11 (CHAPTER 15 & 16)
CLASS EXERCISE (Chapter 15)
1. Divide the class into teams of three to five students each.
2. Ask the students to read the essay at
http://www.telstrainternational.com/uploads/files/CIO%20Magazine%
20Successful%20Partnering%20in%20Asia.pdf
3. Each team should prepare a presentation to discuss the potential
difficulties in the “stateless” global business as pointed out in the essay.
4. The presentation should include students’ recommendations for
overcoming the difficulties.
CLASS EXERCISE (Chapter 16)
Listed here are 14 statements. Using the 5-item scale (from Strongly Agree to
Strongly Disagree), respond to each statement by circling the number that best
represents your opinion.
1. I feel comfortable
challenging
statements made by
my instructor.
2. My instructor heavily
penalizes
assignments that are
not turned in on
time.
3. My instructor
believes that “It’s
final results that
count.”
4. My instructor is
sensitive to my
personal needs and
problems.
5. A large portion of my
grade depends on
how well I work with
others in the class.
6. I often feel nervous
and tense when I
come to class.
Strongly
Agree
Agree
Neutral Disagree Strongly
1
2
3
4
5
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2
3
4
5
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2
3
4
5
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2
3
4
5
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2
3
4
5
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2
3
4
5
Disagree
7. My instructor
encourages me to
develop new and
different ideas,
stability over change.
8. My instructor has
little tolerance for
sloppy thinking.
9. My instructor is more
concerned with how
I came to a
conclusion than with
the conclusion itself.
10. My instructor treats
all students alike.
11. My instructor frowns
on class members
helping each other
with assignments.
12. Aggressive and
competitive people
have a distinct
advantage in this
class.
13. My instructor
encourages me to see
the world differently.
1
2
3
4
5
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2
3
4
5
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2
3
4
5
1
2
3
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5
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2
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5
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5
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2
3
4
5
Calculate your total score by adding up the numbers you circled. Your score will
fall between 14 and 70.
A high score (49 or above) describes an open, risk taking, supportive,
humanistic, team-oriented, easygoing, growth-oriented culture. A low score (35
or below) describes a closed, structured, task-oriented, individualistic, tense, and
stability-oriented culture. Note that differences count, so a score of 60 is a more
open culture than one that scores 50. Also, realize that one culture isn’t
preferable over another. The “right” culture depends on you and your
preferences for a learning environment.
Form teams of five to seven members each. Compare your scores. How closely do
they align? Discuss and resolve any discrepancies. Based on your team’s analysis,
what type of student do you think would perform best in this class?
REVIEW QUESTIONS (CHAPTER 15)
1. What are the six key elements that define an organization’s structure?
Answer: The structure is how job tasks are formally divided, grouped,
and coordinated The 6 Key Elements that define an organization’s
structure are:
 Work specialization
 Departmentalization
 Chain of command
 Span of control
 Centralization and decentralization
 Formalization
(This exercise covers Learning Objectives: Identify the six elements of an
organization’s structure; Learning Outcomes: Discuss the factors that influence
decisions about organizational structure; and AACSB Learning Goals: Reflective
thinking skills.)
2. What is a bureaucracy, and how does it differ from a simple structure?
Answer: Bureaucracy is a complex structure that is comprised of highly
operating routine tasks achieved through specialization, very formalized
rules and regulations, tasks that are grouped into functional departments,
centralized authority, narrow spans of control, and decision making that
follows the chain of command A simple structure is characterized by a
low degree of departmentalization, wide spans of control, authority
centralized in a single person and little formalization. (This exercise covers
Learning Objectives: Identify the characteristics of bureaucracy; Learning Outcomes:
Discuss the factors that influence decisions about organizational structure; and AACSB
Learning Goals: Reflective thinking skills.)
3. What is a matrix organization?
Answer: The matrix structure is used in advertising agencies, aerospace
firms, research and development laboratories, construction companies,
hospitals, government agencies, universities, management consulting
firms, and entertainment companies. It combines two forms of
departmentalization: functional and product.
The matrix attempts to gain the strengths of both functional and product
departmentalization, while avoiding their weaknesses. The most obvious
structural characteristic of the matrix is that it breaks the unity-ofcommand concept. Employees in the matrix have two bosses—their
functional department managers and their product managers. Therefore,
the matrix has a dual chain of command.
The strength of the matrix lies in its ability to facilitate coordination when
the organization has a multiplicity of complex and interdependent
activities. It facilitates the efficient allocation of specialists. The matrix
achieves the advantages of economies of scale by providing the
organization with both the best resources and an effective way of
ensuring their efficient deployment. The major disadvantages of the
matrix lie in the confusion it creates, its propensity to foster power
struggles, and the stress it places on individuals. (This exercise covers Learning
Objectives: Describe a matrix structure; Learning Outcomes: Discuss the factors that
influence decisions about organizational structure; and AACSB Learning Goals: Reflective
thinking skills.)
4. What are the characteristics of a virtual organization?
Answer: The Virtual Organization: The essence of the virtual
organization is typically a small, core organization that outsources major
business functions. It is highly centralized, with little or no
departmentalization. Virtual organizations create networks of
relationships that allow them to contract out manufacturing, distribution,
marketing, or any other business function where management feels that
others can do it better or more cheaply. The virtual organization stands in
sharp contrast to the typical bureaucracy in that it outsources many
generic functions and concentrates on what it does best. The major
advantage to the virtual organization is its flexibility. The primary
drawback is that it reduces management’s control over key parts of its
business. (This exercise covers Learning Objectives: Identify the characteristics of a
virtual organization; Learning Outcomes: Discuss the factors that influence decisions
about organizational structure; and AACSB Learning Goals: Reflective thinking skills.)
5. How can managers create a boundaryless organization?
Answer: The Boundaryless Organization: The boundaryless organization
seeks to eliminate the chain of command, have limitless spans of control,
and replace departments with empowered teams. Because it relies so
heavily on information technology, some call this structure the T-form (or
technology-based) organization. By removing vertical boundaries,
management flattens the hierarchy and:
 Minimizes status and rank.
 Uses cross-hierarchical teams.
 Uses participative decision-making practices.
 Uses 360-degree performance appraisals.
Functional departments create horizontal boundaries. The way to reduce
these barriers is to replace functional departments with cross-functional
teams and to organize activities around processes. When fully
operational, the boundaryless organization also breaks down barriers to
external constituencies (suppliers, customers, regulators, etc.) and
barriers created by geography. The one common technological thread
that makes the boundaryless organization possible is networked
computers. (This exercise covers Learning Objectives: Show why managers want to
create boundaryless organizations; Learning Outcomes: Discuss the factors that influence
decisions about organizational structure; and AACSB Learning Goals: Reflective thinking
skills.)
6. Why do organizational structures differ, and what is the difference
between a mechanistic structure and an organic structure?
Answer: There are four reasons why structures differ.
1. Strategy a. Innovation Strategy - A strategy that emphasizes the
introduction of major new products and services. An
organic structure may be best.
b. Cost-minimization Strategy - A strategy that emphasizes
tight cost controls, avoidance of unnecessary innovation or
marketing expenses, and price cutting
c. Imitation Strategy - A strategy that seeks to move into new
products or new markets only after their viability has
already been proven
2. Organizational Size - As organizations grow, they become more
mechanistic, more specialized, with more rules and regulations
3. Technology - How an organization transfers its inputs into
outputs The more routine the activities, the more mechanistic the
structure with greater formalization Custom activities need an
organic structure
4. Environment - Institutions or forces outside the organization that
potentially affect the organization’s performance Three key
dimensions:
a. capacity,
b. volatility, and
c. complexity.
(This exercise covers Learning Objectives: Demonstrate how organizational structures
differ and contrast mechanistic and organic structural models; Learning Outcomes:
Discuss the factors that influence decisions about organizational structure; and AACSB
Learning Goals: Reflective thinking skills.)
7. What are the behavioral implications of different organizational designs?
Answer: It is impossible to generalize behavioral implications due to
individual differences in the employees People seek and stay at
organizations that match their needs. Some of the research helps to
understand some of the behavior such as:
1. Work specialization contributes to higher employee productivity,
but it reduces job satisfaction.
2. The benefits of specialization have decreased rapidly as employees
seek more intrinsically rewarding jobs.
3. The effect of span of control on employee performance is
contingent upon individual differences and abilities, task
structures, and other organizational factors.
4. Participative decision making in decentralized organizations is
positively related to job satisfaction.
(This exercise covers Learning Objectives: Analyze the behavioral implications of different
organizational designs; Learning Outcomes: Discuss the factors that influence decisions
about organizational structure; and AACSB Learning Goals: Reflective thinking skills.)
8. How does globalization affect organizational structure?
Answer: In terms of culture and organizational structure, many
countries follow the U.S. model. U.S. management may be too
individualistic. Culture may affect employee structure preferences.
Cultures with high-power distance may prefer mechanistic structures.
The boundaryless organization may be a solution to regional differences
in global firms. It breaks down cultural barriers, especially in strategic
alliances. Telecommuting also blurs organizational boundaries. (This
exercise covers Learning Objectives: Analyze the behavioral implications of different
organizational designs; Learning Outcomes: Discuss the factors that influence decisions
about organizational structure; and AACSB Learning Goals: Reflective thinking skills)
REVIEW QUESTIONS (CHAPTER 16)
1. What is organizational culture, and what are its common characteristics?
Answer: Organizational Culture is a common perception held by the
organization’s members; a system of shared meaning. Seven primary
characteristics
a. Innovation and risk taking
b. Attention to detail
c. Outcome orientation
d. People orientation
e. Team orientation
f. Aggressiveness
g. Stability
(This exercise covers Learning Objectives: Define organizational culture and describe its
common characteristics; Learning Outcomes: Describe best practices for creating and
sustaining organizational cultures; and AACSB Learning Goals: Reflective thinking skills.)
2. What are the functional and dysfunctional effects of organizational
culture?
Answer: Cultures defines the boundary between one organization and
others
a. Conveys a sense of identity for its members
b. Facilitates the generation of commitment to something larger than
self-interest
c. Enhances the stability of the social system
d. Serves as a sense-making and control mechanism for fitting
employees in the organization
The liability or dysfunctional effects of organizational culture are they can
be:
a. Barrier to change - Occurs when culture’s values are not aligned
with the values necessary for rapid change
b. Barrier to diversity - Strong cultures put considerable pressure on
employees to conform, which may lead to institutionalized bias
c. Barrier to acquisitions and mergers -Incompatible cultures can
destroy an otherwise successful merger
(This exercise covers Learning Objectives: Compare the functional and dysfunctional
effects of organizational culture on people in the organization; Learning Outcomes:
Describe best practices for creating and sustaining organizational cultures; and AACSB
Learning Goals: Reflective thinking skills.)
3. What factors create and sustain an organization’s culture?
Answer: Cultures begin with the thoughts and values of the founders.
The founders hire and keep only the employees who think and feel the
same way they do. The founders indoctrinate and socialize these
employees to their way of thinking and feeling. Finally the founders’ own
behavior acts as a role model that encourages employees to identify with
them and thereby internalize their beliefs, values, and assumptions.
Factors that sustain an organizational culture or keep it alive are:
a. Selection - Concerned with how well the candidates will fit into the
organization and provides information to candidates about the
organization.
b. Top Management - Senior executives help establish behavioral
norms that are adopted by the organization.
c. Socialization - The process that helps new employees adapt to the
organization’s culture.
(This exercise covers Learning Objectives: Identify the factors that create and sustain an
organization’s culture; Learning Outcomes: Describe best practices for creating and
sustaining organizational cultures; and AACSB Learning Goals: Reflective thinking skills.)
4. How is culture transmitted to employees?
Answer: Employees learn the culture through the socialization process.
The culture is transmitted in a number of forms.
a. Stories - Anchor the present into the past and provide explanations
and legitimacy for current practices
b. Rituals - Repetitive sequences of activities that express and
reinforce the key values of the organization
c. Material Symbols - Acceptable attire, office size, opulence of the
office furnishings, and executive perks that convey to employees
who is important in the organization
d. Language - Jargon and special ways of expressing one’s self to
indicate membership in the organization
(This exercise covers Learning Objectives: Show how culture is transmitted to employees;
Learning Outcomes: Describe best practices for creating and sustaining organizational
cultures; and AACSB Learning Goals: Reflective thinking skills.)
5. How can an ethical culture be created?
Answer: An organizational culture most likely to shape high ethical
standards is one that is high in risk tolerance, low to moderate in
aggressiveness, and focuses on means as well as outcomes. If the culture
is strong and supports high ethical standards, it should have a very
powerful and positive influence on employee behavior. An organization
can create an ethical culture by doing the following:
a. Be a visible role model. Employees will look to top-management
behavior as a benchmark for defining appropriate behavior.
b. Communicate ethical expectations. Ethical ambiguities can be
minimized by creating and disseminating an organizational code of
ethics.
c. Provide ethical training. Use training sessions to reinforce the
organization’s standards of conduct, to clarify what practices are
and are not permissible, and to address possible ethical dilemmas.
d. Visibly reward ethical acts and punish unethical ones.
Performance appraisals of managers should include a point-bypoint evaluation of how his or her decisions measured against the
organization’s code of ethics.
e. Provide protective mechanisms. The organization needs to provide
formal mechanisms so that employees can discuss ethical
dilemmas and report unethical behavior without fear of
reprimand. This might include creation of ethical counselors,
ombudsmen, or ethical officers.
(This exercise covers Learning Objectives: Demonstrate how an ethical culture can be treated;
Learning Outcomes: Describe best practices for creating and sustaining organizational
cultures; and AACSB Learning Goals: Reflective thinking skills.)
6. What is a positive organizational culture?
Answer: A positive organizational culture is one that
a. Builds on employee strengths - Focus is on discovering, sharing,
and building on the strengths of individual employees
b. Rewards more than it punishes - Articulating praise and “catching
employees doing something right”
c. Emphasizes individual vitality and growth - Helping employees
learn and grow in their jobs and careers
(This exercise covers Learning Objectives: Describe a positive organizational culture;
Learning Outcomes: Describe best practices for creating and sustaining organizational
cultures; and AACSB Learning Goals: Reflective thinking skills.)
7. What are the characteristics of a spiritual culture?
Answer: A spiritual culture is one that recognizes that people have an
inner life that nourishes and is nourished by meaningful work that takes
place in the context of the community. The four characteristics of a
spiritual culture are:
a. Strong sense of purpose - people want to be inspired by a purpose
b. Trust and respect - mutual trust, honesty and openness
c. Humanistic work practices - employee empowerment, job security
d. Toleration of employee expression - don’t stifle emotions
(This exercise covers Learning Objectives: Identify characteristics of a spiritual culture;
Learning Outcomes: Describe best practices for creating and sustaining organizational
cultures; and AACSB Learning Goals: Reflective thinking skills.)
8. How does national culture affect how organizational culture is
transported to a different country?
Answer: National cultures differ and organizational cultures often reflect
national cultures. Organization cultures, while strong, can’t ignore local
culture. Managers can help to be more culturally sensitive by: speaking
slowly and in a low tone, listening more, and avoiding discussions of
religion or politics. All global firms (not just U.S. firms) need to be more
culturally sensitive.
(This exercise covers Learning Objectives: Show how national culture may affect the way
organizational culture is transported to a different country; Learning Outcomes: Describe
best practices for creating and sustaining organizational cultures; and AACSB Learning
Goals: Dynamics of the global economy, Multicultural and diversity understanding,
Reflective thinking skills.)