C.4 The External Environment Flashcards
efficiency
amount of resources used to produce a unit of output
effectiveness
degree to which an organization achieves its goals
ways to assess effectiveness
- contingency perspective
- competing values model
- balanced scorecard
- integrated reporting
what are the contingency effectiveness approaches
- resource based approach (inputs)
- internal process approach (org)
- goal approach (outputs)
- integrated effectiveness model (competing-values model)
resource-based approach: indicators and usefulness
indicators:
- bargaining position
- abilities
- response to changes
usefulness:
- value
- limitations
when is resource-based approach a good choice
good for orgs that can’t measure anything else other than their resources (no other obvious indicators)
internal-process approach: indicators and usefulness
indicators: - strong culture & team spirit - confidence, trust, comm - decision-making - rewards for performance, growth, and development - interaction between org and its parts usefulness: - efficient use of resources - harmonious internal functioning
internal-process approach: how does it measure effectiveness
very internal focus to see how efficient they are. all the indicators are subjective and qualitative. doesn’t give a good measurement of effectiveness due to subjective nature
goal approach: indicators and usefulness
indicators:
- meeting operative goals vs official (mission) goals
- multiple (and conflicting) operative goals
usefulness:
- output is measurable
- output can be evaluated
- limitation: measurement of conflicting goals
integrated effectiveness model: indicators and usefulness
indicators: - focus: internal vs external - structure: stability vs flexibility usefulness: - integrates diverse concepts into single perspective - identifies opposing mgmt values
Four approaches to effectiveness values:
What emphasis has Internal Focus & Flexible?
What are its primary goals and subgoals?
HR Emphasis: Primary goals: - HR development Subgoals: - Cohesion - Morale - Training
Four approaches to effectiveness values:
What emphasis has External Focus & Flexible?
What are its primary goals and subgoals?
Open-Systems Emphasis Primary goals: - Growth - Resource acquisition Subgoals: - Flexibility - Readiness - External Evaluation
Four approaches to effectiveness values:
What emphasis has Internal Focus & Control?
What are its primary goals and subgoals?
Internal-Process Emphasis Primary goals: - stability - equilibrium Subgoals: - info. mgmt. - communication
Four approaches to effectiveness values:
What emphasis has External Focus & Control?
What are its primary goals and subgoals?
Rational-Goal Emphasis Primary goals: - productivity - efficiency - profit Subgoals: - planning - goal-setting
rational goal emphasis:
- what type of structure?
- culture?
- vertical
2. mission
internal-process emphasis:
- structure?
- culture?
- functional
2. bureaucratic
HR emphasis:
- structure?
- culture?
- horizontal
2. clan type
what are elements of a balanced scorecard?
- customer satisfaction
- short & long term financial performance metrics
- production and operating statistics
- metrics for forward-looking human capital development
integrated reporting a.k.a.
sustainability reporting
example of effectiveness indicators
- company goals
- stakeholder goals
- contingency perspective approaches
- values in competing values model
- balanced scorecard metrics
- integrated reporting standards
An organization is: 1. 2. 3. 4.
- a social entity
- goal directed
- deliberately structured & coordinated
- linked to the environment
define organizational environment
all elements outside the boundary of the org that have the potential to affect the org
task environment
- core environment
- direct impact: industry sectors, raw materials sectors, market sectors, HR sectors, competitive landscape, and international sectors
general environment
- everything else lol
- indirect impact: govt sector, sociocultural sector, technological sector,. financial resources sector, and economic conditions sector
industry sector
- competitors
- industry size and competitiveness
- related issues
raw materials sectors
- suppliers
- manufacturers
- real estate
- services
HR sector
- labour market
- employment agencies
- universities
- training schools
- employees in other orgs
- unionization
financial resources sector
- stock markets
- banks
- savings and loans
- private investors
market sector
- customers
- clients
- potential users of products and services
tech sector
- techniques of production
- science
- computers
- IT
economic conditions sector
- recession
- unemployment rate
- inflation rate
- rate of investment
- growth
govt sector
- city, state
- federal laws and regulations
- taxes
- govt services
- court system
- political process
sociocultural sector
- age
- values
- beliefs
- education
- work ethic
- religion
- consumer and green movements
international sector
- competition from acquisition by foreign firms
- entry into overseas markets
- foreign customers
- regulations
- exchange rates
environmental uncertainty: simple vs complex
the more unique factors the more complex
environmental uncertainty: stable vs unstable
unstable means the changes are quick, unpredictable, and hard to prepare for
environmental uncertainty:
simple + stable =
low uncertainty.
not affected by much and doesn’t really change (or changes real slow)
environmental uncertainty:
complex + stable =
low-moderate uncertainty.
you can deal with the uncertainty from having many elements bc changes happen so slowly
environmental uncertainty:
simple + unstable
high-moderate uncertainty.
not a lot of sectors but the second any of them change it’s real fast
environmental uncertainty:
complex + unstable
high uncertainty.
a shit show
examples of low uncertainty
- soft drink bottlers
- beer distributors
- container manufacturers
- food processors
examples of low-moderate uncertainty
- universities
- appliance manufacturers
- chemicals
- insurance
examples of high-moderate uncertainty
- e-commerce
- fashion clothing
- music industry
- toy manufacturers
examples of high uncertainty
- computer firms
- aerospace firms
- telecommunications
- airlines
how can a firm adapt to uncertainty?
- adding positions an departments
- buffering & boundary spanning roles
- differentiation and integration between departments
- mechanistic vs organic management
- planning, forecasting, and responsiveness
what is buffering
traditional version of boundary-spanning where they would make departments around a specialized core so that nothing would distract the specialized core
what is a boundary spanning role
exmaple: dual role of marketing where they send environment out and also bring it back in. customers don’t like a product? why? bring that back in. now send info back out to show how adaptive they are
differentiation
as we become more uncertain and complex our departments need to become more specialized
integration
when you need to add a horizontal communication link to make sure information is getting exchanged
how should low uncertainty deal with environmental uncertainty?
- mechanistic structure; formal, centralized
- few departments
- no integrating roles
- current operations orientation; low speed response
how should low-moderate uncertainty deal with environmental uncertainty?
- mechanistic structure; formal, centralized
- many departments, some boundary spanning
- few integrating roles
- some planning; moderate speed response
how should high-moderate uncertainty deal with environmental uncertainty?
- organic structure, teamwork; parcipitative, decentralized
- few departments, much boundary spanning
- few integrating roles
- planning orientation; fast reponse
how should high uncertainty deal with environmental uncertainty?
- organic structure; teamwork
- many departments differentiated. extensive boundary spanning
- many integrating roles
- extensive planning, forecasting; high speed response
what is resource dependence
when an org depends on the environment
the amount of resource dependence you have puts you on the spectrum of what two things?
control vs autonomy
methods to control resources (inter org links)
- ownership
- strategic alliances
- cooptation, interlocking directorates
- exec recruitment
- advertising & PR
methods to control the environment
- change domain
- political lobbying
- trade association
- illegitimate activities
define cooptation
companies try to get an influential person on their BoD to help with controlling or addressing resource dependencce
define direct interlock vs indirect interlock
direct: Bob sits on company A and B. Bob will push for things that help A to B
indirect: Bob sits on A, Frank sits on B, and Bob and Frank both sit on C
