Chapter 10: Structure and Culture Flashcards
What are the three ways the term “organization” can be understood?
- Creative Terms: An organization is organized.
- Instrumental Terms: An organization has an organization.
- Institutional Terms: An organization is an organization.
What is the instrumental perspective of an organization?
It emphasizes the need for structures as structuring forces, focusing on formal specifications that define tasks, responsibilities, and authority.
What are organizational structures?
Rules that an organization establishes or develops over time to provide orientation for its members.
What are formal and informal structures in an organization?
Formal Structures: Explicit rules and specifications for tasks and authority.
Informal Structures: Implicit hierarchies, role distributions, and unwritten rules formed through social interactions.
How are culture and structure interrelated in an organization?
Structures shape culture, and culture influences the functioning of structures.
Culture includes fundamental understandings, values, and norms expressed in actions, decisions, and artifacts.
Is organizational culture homogeneous? Why or why not?
No, subcultures emerge within groups, especially as specialization increases, forming unique languages, values, and understandings.
What is the principle guiding the design of organizational structures?
“Structure follows strategy” to support strategy implementation and core processes effectively.
How has the principle of “structure follows strategy” evolved?
1990s: Became “structure follows process” with business reengineering.
Strategic process management: “Process follows strategy”, ensuring alignment between strategy, processes, and structures.
What are the four basic types of organizational structures?
- Line-Staff Organization.
- Matrix Organization.
- Network Organization.
- Process Organization.
What is a Line-Staff Organization?
Groups similar activities under hierarchical line management.
Staff units add specialized functions.
Can be function-based or division-based for growth and flexibility.
What is a Matrix Organization?
Structures by business units or customer groups with a primary dimension.
Challenge: Managing conflicts between dimensions (e.g., central departments vs. business units).
What is a Network Organization?
Composed of independent units with great autonomy, managed centrally by a focal element.
Example: Holding companies focus on individual targets rather than centralized structures.
What is a Process Organization?
Ensures standardized overall responsibility for processes for high quality and efficiency.
Challenge: Coordinating communication, work, and IT processes across functions.
What is the challenge of tight coupling in process organizations?
Optimized “process engineering” and tight coupling of IT and communication processes may cause the organization to “freeze.”
What factors influence the design of an organizational structure?
Besides effectiveness and efficiency, other factors include:
- Organizational controllability.
- Focusing on those concerned (e.g., monotony avoidance, safety).
- Regulatory requirements (e.g., mandatory specialized departments).
- Development phases of the organization (e.g., growth vs. startup).
How does organizational structure vary across development phases?
Growth phase: Focus on markets, clear responsibilities.
Creative startup phase: Emphasis on open, interdisciplinary team structures
What are economies of scale, and how do they affect structure?
Group similar activities to achieve efficiencies.
Example: Centralizing production at a few sites for increased efficiency in manufacturing processes.
Strongly hierarchical line-staff organizations support specialized activities.
How do learning effects influence organizational structure?
Higher specialization leads to cost and quality advantages.
Example: Hospitals group treatments by specialty to enhance surgeon efficiency and handle complications better.
What are network effects in organizational design?
Focus on fast growth while maintaining cohesion.
Example: Franchising systems or flexible “production cells” in airlines.
Independent units integrate and coordinate for customer benefit.
What are economies of scope, and how do they affect structure?
Align structures with customer processes to increase willingness to pay.
Example: Financial services with customer advisors coordinating all services or universities managing admissions centrally.
Why do organizational structures often overlap?
Different forms of organization may coexist, such as:
- Customer-oriented activities as process organizations.
- Functional line-staff structures for other functions.
What legal factors affect organizational structure?
Determining structure is an inalienable task of top managers (e.g., Swiss Code of Obligations).
Structures can be regulated by corporate or contract law (e.g., line-staff via internal regulations, networks via subsidiaries).
How does the environment influence organizational structure?
Organizations must adapt to:
- Competitive strategies.
- Environmental developments.
- Changing stakeholder expectations.
Example: Transition from hierarchical military units to flexible networks in asymmetric warfare.
What challenges arise from growth and specialization?
- Increased hierarchical levels slow communication and decision-making.
- Functional specialization can lead to silo thinking and fragmented organizations.
- Management must bridge divisions and ensure integration.
What is fragmentation in organizations?
Formation of operational “islands” where departments prioritize their own goals over overarching organizational objectives.
How can organizations prevent fragmentation?
Use boundary-spanning tools (e.g., management models, business planning).
Implement effective management and communication measures.
Why might hierarchical levels introduce barriers?
Hierarchical levels develop unique identities and agendas.
These barriers can impede collaboration and slow decision-making.
How do functional departments contribute to silo thinking?
Employees align with their group’s standards and jargon.
Functional training and licensing can reinforce distinct departmental identities.
What measures can address specialization-induced silos?
Management mediates between departments with differing priorities.
Example: Balancing short-term KPI focus (controlling) with long-term goals (marketing).
What are the smallest task-bundling units in an organizational structure?
Jobs
What is the next level above jobs in an organizational structure?
Departments, which group jobs with similar or complementary activities.
What can departments be combined into in larger organizations?
Divisions.
What are the three key aspects that must be defined and coordinated at all organizational levels (job, department, division)?
- Tasks
- Competencies
- Responsibilities
How can tasks, competencies, and responsibilities at different levels be defined and coordinated?
Using function diagrams.
What are function diagrams used for?
Assigning tasks to units and determining the powers of individual positions (e.g., planning, decision, codetermination, execution, withholding approval).
What common schemes are used within function diagrams to assign roles?
RACI (Responsible, Accountable, Consulted, Informed).
What is an important principle that function diagrams help verify?
Avoiding duplication of responsibilities.
What are the two perspectives on a company provided by organizational structure and process organization?
- Organizational structure defines the organizational framework.
- Process organization regulates the work processes within that framework.
When does process organization become important?
When the organizational structure complicates the execution of complex projects and tasks.
How does process organization help in managing cross-departmental tasks?
By assigning individual processes to units and revealing dependencies and conditions in terms of time and substance.
Name three examples of processes requiring structuring through process organization.
- Granting building permits in public administration.
- Planning and delivering a production plant in mechanical engineering.
- Emergency intervention with follow-up treatment in a hospital.
Name three classical instruments for process organization.
- Bar charts.
- Network planning technique.
- Sequence planning.
What do bar charts represent in process organization?
Processes and steps as horizontal bars on a time axis, often assigned to individual units.
How does the network planning technique display processes?
As a graphical sequence of interlinked activities, showing dependencies between upstream and downstream operations.
What are the two dimensions of every organization?
- Formal dimension (e.g., hierarchies, official channels).
- Informal dimension (e.g., emotional relationships, personal networks).
Why does an organizational chart represent only part of organizational reality?
It depicts formal structures but not informal interactions and relationships.
Provide an example of informal dependencies in an organization.
A subordinate captaining the local tennis team where their manager is a player, creating informal influence.
What does the phrase “Culture eats Strategy for breakfast” mean?
It means that a strategy and an organization function only within a culture that supports them. An organization also shapes its culture through external demarcation and internal integration mechanisms.
What are external demarcation mechanisms in organizational culture?
Cultural or structural mechanisms that restrict information exchange with members outside the organization, such as business secrets.
What are internal integration mechanisms in organizational culture?
Value concepts or terminology that form a corporate culture and differentiate it from other organizations.
Why is identifying and shaping organizational culture important?
Because culture represents an organization’s way of life, influencing how members handle topics and make decisions, and providing a common interpretive framework.
How can organizational culture become visible?
Through “artifacts,” such as office design, working hour expectations, or supply arrangements.
What is Schein’s model of culture levels?
A framework dividing culture into three levels:
- Basic premises (fundamental assumptions).
- Collective values (communicated values).
- Artifacts (observable behaviors or physical symbols).
What are basic premises in Schein’s model?
Fundamental assumptions about the company’s environment, function, purpose, and success factors, forming the implicit core of a culture.
How are collective values described in Schein’s model?
As the proclaimed or communicated values, often articulated in mission statements, representing shared beliefs and priorities.
What are artifacts in Schein’s model of culture?
Observable behaviors or visible symbols, such as office design or meeting rituals, that reflect the culture.
What are Hofstede’s six dimensions for describing cultures?
- Power distance
- Individualism
- Masculinity
- Uncertainty avoidance
- Long-term orientation
- Indulgence
How do Scandinavian cultures differ in Hofstede’s typology?
They exhibit small power distance and low masculinity.
How does Switzerland rank in Hofstede’s typology?
It is characterized by high uncertainty avoidance and strong long-term orientation.
What matrix did Deal and Kennedy propose for typologizing corporate cultures?
A matrix with two dimensions:
- Risk propensity
- Feedback speed
What can the interaction of culture and structure demonstrate?
For example, a bureaucratic “process culture” can hinder the dynamics of a network organization.
How can organizational culture be changed?
By closely examining artifacts, basic premises, myths, stories, and shared experiences, and by fostering collective reflection processes to establish new basic premises.
What opportunity can arise from shared experiences like overcoming a crisis?
They can foster collective reflection processes that establish new basic premises and reshape organizational culture.
Provide an example of a cultural change from a shared experience.
If a company overcame the coronavirus crisis through personal responsibility, this success logic could change the fundamental premises of the culture.
Goals/Criteria of the internal organization are?
- Functionality (“structure follows process follows strategy”)
- Productivity (which in theory means maximum differentiation)
- Controllability with regard to specific tasks/objectives in specific contexts
(contingency approach) - Focus on people
(e.g. avoidance of monotony, occupatoinal safety etc. human relations approach) - External connectivity
(e.g. regulatory authorities, parent company, etc. by providing certain points of connection)
Which are the formal elements of an organization?
Job
- Smallest organizational unit
- Composed of subtasks
Task (What)
- Static: Target performance
- Dynamic: Activities to achieve target
Competencies (How)
- Rights and powers
- Power of disposal over resources
Responsibility (To whom)
- Duties
- Personal accountability
==> Task, competence and responsibility should be congruent
What are the four characteristics of organization culture in the SGMM?
- Culture is the entire way of life and practice of an organization
==> The way we do things around here - Culture is based on a frame of reference and meaning
==> a shared “interpretation tool” that allows employees to adequately interpret events and developments in an organization and its environment - Even if an organizational culture is effective implicitly, it (often) becomes visible in material form
==> Artifacts of culture can be: Design of offices/expectations regarding working hours/catering arrangements - Culture evolves over time, has a deep-seated historical component
What questions can be used to identify an organizational culture?
- Which proclamations are there in our organization
(Regarding how to deal with customers or regarding how to deal with each other) - Which artifacts can be observed in our organization?
(What would I see, hear, feel, smell if I exposed myself to my organization) - Which contradictions between proclamations and artifacts can we find?
(Indications that the communicated does not correspond to the lived culture) - Which basic assumptions could be subliminally governing the organization’s?
(Images of man, organizational images, ideological assumptions)
