Ch5 Flashcards
Define formal organization, formalization, and structure
● Formal organization: Codified structures
● Formalization: Extent of written rules and procedures
● Structure: Formalized patterns of interactions that link an organization’s people and jobs
Name one advantage and disadvantage of formalization
● Advantage: Self efficacy
● Disadvantage: Loss of autonomy
Name 5 types of organizations!
● Simple
● Functional
● Divisional
● Matrix
● Ambidextrous
Name two characteristics of simple structure
● Highly informal
● Centralized
Name two advantages and one disadvantage of functional standards
● High centralization = Coordination
● Efficient use of talent
● Disadvantage: Difficult to set uniform performance standards
What divisions can you create? Name two examples
● Geography and product
Name one advantage and one disadvantage of a matrix organization
● Advantage: Specialized personnel and equipment
● Disadvantage: Can cause intense power struggles
What drives structure? Name for each point two examples
Environment
- Stable environment:
● Efficiency
● Centralized structures
- Turbulent environment:
● Flexibility
● Decentralized structures
Strategy
- Cost leadership strategy:
● Efficiency
● Centralized structures
- Differentiation strategy:
● Flexibility
● Decentralized structure
Name two elements of strong cultures!
● Charismatic leaders
● Shared values
Why would you need culture in a company?
● Helps in controlling
Matrix Structure
+ Specialized personnel and equipment
+ Broader range of responsibility & experience
- Can cause intense power struggles
- Working relationships become more complicated
Divisional Structure
+Separation of strategic and operating control
+ Development of general management talent
- Can be very expensive (duplication)
- Can cause a dysfunctional competition between divisions
Functional Structure
+ High centralization = coordination and control
+ Efficient use of managerial and technical talent
- Difficult to set uniform performance standards
- Possible silo thinking
Why designing a formal organization
− impacts decisions concerning the development and allocation of resources and skills
− sets the focus of attention of decision-makers and shapes information processing capacity
− channels information in order to align decisions
ambidextrous organizations
Different alignments held together through senior-team integration,
common vision and values, and common senior-team rewards
The elements of “strong” cultures
- Charismatic leaders/heroes
- Clear vision/direction
- Shared symbols
- Shared values/norms
What Structure for which strategy
- Cost leadership strategy (functional)
− favors efficiency
− favors a centralized, taller organizational structure - Differentiation strategy (divisional)
− favors flexibility
− favors a decentralized, flatter organizational structure
Hybrid strategy
− favors combined efficiency and flexibility
− favors a matrix or an ambidextrous organization design (under what conditions?)
