3.10 - Organisational Structure Flashcards
Whats organisational/corporate culture and how types is there?
Culture is built up over no. yeasr as a result of which 4 influences?
Sums up spirit, attitudes, behavioursðos of orgnisation embodied in people woring there via traditions built up overtime (how poeple interaact&how things done over time) 1 Strong (healthy) 2 Weak (unhealthy)
- aim/mission of business
- behaviour of comany directors&other seniro staff (role models)
- attitude of senior managemnent to enterprise&risk
- recruitment&training procedures (eg/risk avser to suit culture)
What factors does culture consist of?
Give 3 example of how cultre of a buiness is reeflected
- shared values of business
- beliefs&norms affceting every aspect f work life (noral way to act)
- behaviours of typical day to day behaviour (eg/ do managers sit sepeate from employees?)
- strnegth of culture determines how diff/easy it is how to behave in business (weak=dont know how to behave)
1 how employees recuited (which is more suitable, will they fit in with culture)
2 how work space&delegation/individual responsibility=roganised (formal set up eg/rows)
3 how staff call each other&methods&resposivness of organisation
What sthe importance of organisational culture?
What are key charcteristics of the 2 types of organisational strcutres?
Is at heart of every business&can impact all stakeholders&decison making
Can impact on success of change anagemnet eg/if cultre happy with changes/regimental&resist change
1 STRONG/HEALTHY
- employees need less supervision (behvaiour natirally fits with compny values)
- focuses on customers real needs (staff actually belive in thing selling)
- attitude of “can do”=motivated=productive&feeling for organoisatopn as “us”&conviction orgnsiation=force for good(feel part of it not just have to for work&believe in product)
- loyal staff=low staff turnover
2 WEAK/UNHEALTHY
- dont share company values (dont believe on system/trying to achieve)
- have to be forced to compy with company values through policies&”must we” attitude (questioning)
- weak motivation&productivity=dont feel valued/part of it=high staff turnover
Whic model identifies 4 types of organsiational culture? Explain it
Handy identifed 4 types 1 POWER (few key people at centre of organisation who make all major decisions, other employees refer to these to get decision made=common in small businesses where founder heavily involved&wants to keep close control, +those at centre have overview of everything done=quicker decision making&consisitent approach -as expands puts greatr pressure on centre=overload on key managers=slow decison making&stress so only effective in small departments) 2 ROLE (individuals=clear role, know who to report to&who responsible for, commonly adpated as business move from power culture&starts to formalise processes&procedures more&adopt fnuctional organisational strcuture, creating order, structure&certainty) 3 TASK (indiviudias identify with task working on&each persons importance depends on ability to contribute to particular project regardless of age/seniority/length of service-common where theres many projects eg/advertising businesses) 4 PERSON (individuals have own space&given own parts of business to control eg/exists in hospitals surgeons have independence +respects indivuduaks experise -not consistent&senior managers placing high level of trust in others in organsaition)
Which model identofes 6 types of orgnsaitional culture?
Hoftsede idenified 4 (later 6) areas of national culture (diff people from diff parts of world have diff cultures eg/mediteranean=enthusiastic, party, open/British=reserved, formal, cautious)
1 POWER DISTANCE (considers extent inequality=tolerated&whether theres strong sense of position&status, high PD score=national culture accepts&encourages bureaucracy&high respect for authority&rank, low=encourages flatter structure&greater emphasis on personal responisibilty&autonomy)
2 INDIVIDUALISM/COLLECTIVISM (some societies value performance of indiciduals eg/American Dream, for others team performance=more important=have importnant implications for financial rewards at work eg/individual bonuses vs profit sharing for bigger groups)
3 UNCERTAINTY AVOIDANCE (considers diff attitudes to risk taking between countries-view anxiety in unkown situations, low UA=willingness to accept more risk, work outside rules&embrace change=more entreprenuerial national culture, high=more support for rules, data, clarity of roles&responsibilities=less entrepreneurial as consequence)
4 MASCULINITY VS FEMININITY (diff in decision making=M=hard edged, fact based&aggressive style, F=much greater degree of consultation&intuitive analysis)
5 LT VS ST ORIENTATION (concerned with diff emphasis national cultures have on time horizons for business planning, objectives&performance eg/Britain=increasingly impatient&want immediate rewards/Germany=dont mind suffering now bc will be better off-LT approach=implicates impact on decisons&risk taking)
6 INDULGENCE VS RESTRAINT (indulgence=society that allows relatively free gratification of basic&natural human drives related to enjoying life&having fun, restraint stands for society that suppresses gratification of needs®ulates it by means of strict social norms)
Provide an example of a business with a strong/healthy business culture
WALT DISNEY
- intends to extend magical experience to employees&organisational culture
- pride, culture, wonderful community, amazing growth opportunity&creative atmosphere
- Disney only hires people who align with what they stand for&provide many employee benefits inc access to Mickey’s Retreat (exclusive area for cast members&families), generous discounts, incentive schemes&private healthcare=know company cares
KRAFT HEINZ
- after merger ruthless strategy of major job&expense cutting which worked ST=appears to have fatigued organization
- lots expected from employees making work/life balance challenging=11 hour days have become norm&toxic environment sums up culture (showed in no. employee reviews which screams red flag for any employee considering working there
- cant cut way to growth as wont create loyal, engaged employees with this mindset
Hoftedes model idenified 4 (later 6) areas of national culture. What are the implactions of his work?
Reasons for change in organisaional structure, providing benchamrk - why should change to be more/less risky (eg/firm carries out own research&finds UA in firm=higher than UK nattional avg., might choose to do something about culture of risk aversion eg/encourage bonus for taking risk bc is culture affecting performance-too cautious/holding bcack?
Ways of changing organisational culture (possibly change balance of staff in terms of nationalities)
Problems of changing organisational structure (if national characteristics=as constant as Hofstedes work implies may be very diff to shift staff cultures eg/make chinese workers very reposnive to democratic but goes against culture=prefer being told what to do)
Plan for communications when: trading with intenational suppliers, expanding into new countries, during mergers/takeovers=recognise if implementing your culture would work
Good for multinationals: could help assess how proposed changes will affect employees in diff countries, can then adjust to changes to match diff cultures in diff countries-are cultures similar, will it work?
What are the 6 influences on organisational culture?
1 Influence of founder (set visions&core values which shapes culture, reward systems&appraoch to decision making eg/Ikeas=modest,drove common car etc depite being billionaire) 2 Business size&complexity (as become larger&more comlpex perhaps inevitable its culture changed too eg/smaller=+informal approach to how things done, larger=more formal) 3 Rewards (reward system can have significant influence on culture eg/if routinely paid through bonuses have diff apprqaohc to dooing things than tgose just paid on salary-could encourage risk taking) 4 Industry/market (linked to influence of reward systems since often based on nature of industry/market eg/creative industries cultures shaped by need to encourage team work&innovation) 5 Organisational strcuture (structure adapts to reflect ways people in business find works best) 6 Work enviro (delibertely designed to support existing &/or deesired culture=physical enviro people work in msut influence culture at business=influences comm eg/work from home/sit togther/alone)
A business wants to change its orgnsaitionsal structure because it needs to change strategic direction. To what extent do you think itll have to change leadership too to successfully change its culture?
Intro=in some, doesnt havent to change but does in most as likely to be important factor where business believes culture=cause of need for new strategic direction
One hand=most liekly needed in situtaions where existing culture=strong&existing leaders=liekly to resist new strategic direction, cultures often deeply engrained&power cultures where decision makking=limited to few in centre so liekly to resist due to self interest even if cultures damaging to business eg/failing to innovate, so new leader has greater authoruty to challenge way things=done&comm. why new culture=important for successful strategic direction eg/might encourage democratic decion making, new leader maybe successful if use comm&education etc but depends on recruiting right person so better chance if have experience from elsewhere&strong personal skills to persuade
Other hand=culture change=diff&no gurantee new leader will be +successful than existing, in mnay cases culture will outlast any particular leader eg/business may have culture strongl influenced by founder, has ways of doing things understood&accepted by all, new leader may face resistance too so might be better to support existing leader as know business well, have good undetndin of where resistance may arise&overcome so might just need approp. support&incentive to lead culture change
What are 4 main reasons why a business may wants and/or need to change its organisational strcuture/
1 Business performance (when threat of business survial=sign things need to change inc. culture eg/become complacent about need to innovate&lost edge so competitors now have advantage)
2 New leadership/strategy (new leader often align change in strategy with call for change in culture usually bc existing identified as potential restraining force reucing chance of successful change in managennt)
3 Change in external enviro (ext. shocks=powerful facilitor of cultural change eg/financial crisis showed cultural change needed in firms taht survived-culture of reward&excessive risk taking)
4 To support change management (new leadership&existing managers identify need for change as part of change initaives designed to improve competitiveness eg/change culture to change something else eg/change from centralised to decentralised to change how business communicates)
What are 5 reasons why changing organisational structures can be difficult?
Reluctance of staff to change/entreched attitudes
Staff dominated by certain type eg/MC men
All staff&middle managemnt must believe changes going to happen&is right one
Messge msut be clear&consistent
Sometimes change in culture isnt needed&is unsuccessful
What is strategic implementation?
What are the 5 stages in a strategic planning process?
Change=unavoidable so strategy to implement required change=vital for success, inc:
Putting plans into action (to achieve goals)
Plan then put ino practice&executed properly
1 senior managers set LT corporate objectives based on overall aims/missions
2 analysis of internal position of business to identify strengths&weaknesses (SWOT)&analysis of external enviro to identify opp.&threats (PESTEL)
3 develop various strategies to meet corporate objectives, evaluate each, then choose which best fits business
4 plan out how strategy will be implemented (inc outline functional objectves for each department&resources needed)
5 set up process for monitoring&evaluating strategy as its implemented
What are 3 factors influencing the planning of a strategy? Include models&tools which help with each planning stage
1 Analysis of internal&external fatcors (eg/finance=efficiency ratios, resources)
- SWOT/PESTEL
- Porters 5 force
- Balanced scorecard
2 Analysis of risk&feasabiililty (possible to carry out-is there right resouces&skills?)
- Decison trees
- Investment appraisal&sesnitivty analysis
- Stakeholder mapping
3 Developing contingency plan
-outlnie what to do if something unexpected happens eg/crisis/change in demand etc (impoaaible to plan everything but consdier how likely something=to hapen/howbad itll be if did) aka crisis managemnet&maangers have to repsond where contingency plan helps decisoion making (managers need quick decsions to limit damage possibly best achieved through autocratic)
Strategic planning creates a strategy
What are the advnages adn disadvantages of strategic planning?
+ Can help give clear direction&communicate to all exactly what business is trying to achieve
+ Makes manages think of SWOT (helps match strategy to situation)
+ More useful in stable market (can be followed through)
- Strateguc planning can restrict flexibility (become scared of change&stick with strategy but somethong changes so no longer useful)
- Possibly based on inaccurate info so plan=inaccurate
- Not useful to innovative business es who constantly need to respond to change (emeergent stratgey may be more suited=develop sragey constantly to changes)
Whast the valuue of leadership in strategic implementation?
Good leader can take action to make sure implemenetation of strategy (usually requiroing changes) will go as smoothly as possible
Good leader should:
- take overall ewposnibility for management of strategic implemenetauion construcing clear visison&explanation of steps to get there&set example
- appoint right managers&delegate resposnisbilties fro diff elements where necessary
- motivate allto enageg in proocess by creating positive culture&keep going in difficult ST
- leadership style adopted=important in maanagemnent of chnage
otter&Schlesinger can be used to explain barriers to chnage neeeding effective leadership&6 ways of overcoming them
Is new leadership a requirement of change/implementing a new organisational strategy?
Give a reason why an external leader may be necesary and why not
One reason why new external leadership IS essential in order for business to achieve successful change is that change required is likely to have arisen bc of inappropriate strategy by previous leader, indicating new direction is required (bc leadership becomes complacent&assumes previous business success will continue despite changes to nature of competition=business may lack investment in innovation=lead to business losing its competitive edge, either bc its costs=too high/it lacks innovation required to keep up with more agile competitors so existing leadership needs replacing, ideally by leaders who havent allowed business to drift off course=new strategy needs new perspective most likely to come from new external leader)
DONT need external leadership to achieve successful change bc internal leaders=just as capable of driving successful change as external leader=new leader drawn from existing business=more likely to have in-depth experience of business, both in terms of its competitive strategy&important organisational cultural issues that need to be considered as part of change-taking culture argument further=leader with deep experience in business will understand what Handy called “the way we do things around here”, a leader immersed in existing organisational culture ought to be better placed to understand key internal forces resisting change&identify strategy to overcome them by bringing whole organisation with him/her
Whats the value of communications in strategic implemenetation?
Purpose of comm is to pass ideas, info&motivate people eg/fucntional objectives to department managers, coordinate activities, employee needs told how strategic change will impact their role&resposnibility
Whats the importance of organisational strcuture ins tartegic implemenataion?
Firms structure=how set up&organsied in terms of people, fucntions&departments
- organisational charts can be used to show levels of authority, hierarchy&lines of comm.
- based on stragey being i lemented may need to change organisational strcture
4 types:
-Functional (by departments)
+employees with same skills&expertise work together=implementing strategey=easier
-lead to rivalry between departments (each may have own culture&focus on own priorities-if comm. isnt good between itll be hard to comm. strategy)
-Product based (built around)
+ideal if strategy=focused on individual products eg/grow MS of 1 product
-unnecessary duplication of rules=inefficient
-Regional (diff areas in countries)
-Matrix (mix-business can be interchangeable)
What are the 4 types of organsaitional strcture?
Incklude an advantage and disadvantage of each
1 FUNCTIONAL STRUCTURES (orgnaise staff by department)
+ employyes with same skills&expertise work together, making implementing strategy easier
- can lead to rivalry between departments (each have own culture&focus on own priorties, if comm. isnt good between deprtments tll be hard to commmuniacte stargyety)
2 PRODUCT BASED STRUCTURES (organise satff by product=each product has own division, director, makreting team etc)
+ ideal is strategies=focused on individual products eg/grow market share of 1 product&keep market share steady of another)
- unnecessary duplictaion of roles=inefficint
3 REGIONAL STRUCTURES (orgnanise staff by geoegraphical location)
+ tend to suit market development strategy (if diff markets demand diff things, a business can=decentralised&adapt to local needs)
- unnecessary duplication of roles=inefficient
4 MATRIX STRUCTURES (organsie staff by combo of fcators eg/project&function)
+ staff have clearly defined objectives&it encourages departments to build up relationships
- poosible conflict(eg/project&department mnagers might have diff ideas about how strategy can be implemented)
What is network analysis?
Complex roject broken into series of activites to help identify critical path aka activities requiring most careful management&scrutiny (so strategy=implemeneted cost efficiently&on time)
Critcical activiities if delayed=whole project delayed
Order&sequence which activitise must be performed in=worked out&duration of each=estimated
Then arranged as network/graph showing whole project from start to fionsish&showing which tasks can be performed at same time&shortest time required from strat to finsh=identified (get project completed asap)
Network analysis includes breaking a complex roject into a series of activites to help identify the critical path
What does the essential techniques include to construct a moel of a project?
Using that info what does ir calculate?
1 list of all activities required to complete project
2 duration eacha ctivity takes to completion
3 dependenciies between activities (eg/cant cook bacon without heating grill first)
1 longest path of planned actiities to end off projwct
2 earliest&latest each activity can strat&finish without making project longer¶llel activities (can be done at same time)
Calculating EST (eariest start time) prvdes 2 key bits of info:
-earliest date certain resources needed (skilled workers, raw materials, machinery etc avoids tieing up working capital unnecessarily)
-earliest completion date for whole project (ensure youre prepped eg/stock on shelves when campaign goes out)
Calculating LFT provdes 3 kety bits of info:
-provides deadlines that musyt be met for project to be completeed on time
-heklps identify actovities with float time (slack between EST&LFT)
-identifies critical path
Network analysis includes breaking a complex roject into a series of activites to help identify the critical path
What are critical paths/activties?
What is float time?
Critical path=no float time (if overrun, expected duration will be extended)
-by identifying it managers can apply management by exception (focus on excpetionally important tasks instead of spreding efforts thinly)
Float time=how long can be delayed wihtou tmaking project longer (important for amnagers to identify bc these can have flexibility eg/start it later)&are only non critical activuties Total float(time can delay any activity without delaying completion)=LFT-duration-EST
Network analysis includes breaking a complex roject into a series of activites to help identify the critical path
Give advantages and limitations
+ Helps reduce risk&costs of complex projects by encouraging careful assessmnet of requirements of each activity in project
+ By identifying activities that can be completed simulatnously, reduces total project time=time based managemnet (important if trying to get product out first for comptitive advantge
+ Help spot activities with some slack/float so can transfer some resources creating better alloctaion of resources
+ Resources/stock ordered no earlier than scheduled EST so cash outflows=delayed as long as possible (good forworking capital managemnt)=JIT
+ Decision making AND planning tool in 1
+ Providse useful overview of complex project (if somethings delayed, netwrok diagram=good strating point for wokring out implications&alt course of action, network can be amended throughout project)
+ Links well with other aspects of business planning inc cash flow forecasting&budgeting
- Reliability largely based on acccurate estiates&assumptions
- Doesnt guarantee success of a project (still needs mnanaged properly)
- Resources may not actually be as flexibiie as mnagement hope when come to address network float
- Too mnany axctivities make netwrok diagram too complicated (activities as selves broken into mini projects)
- Might be tempting for employees to cut corners to meet tight deadlines on critical activities=quality suffers
- Doesnt tell anything about costs/returns from strategy/project
What are the 5 difficulties with strategic decision making?
RISK (difficult to acount for unknowns/difficult to figure out which bits=risky)
EXTERNAL ENVIRO (onstantly changing)
INTERNAL ENVIRO (changes)
FEASIBILITY DIFFICULT TO JUDGE (info needed on rsources, skills&time available)
STAKEHOLDERS (often want diff things)
