Chapter 10: Structure and Culture

Question 1

What are the three ways the term “organization” can be understood?

Answer 1

1. Creative Terms: An organization is organized.
2. Instrumental Terms: An organization has an organization.
3. Institutional Terms: An organization is an organization.

Question 2

What is the instrumental perspective of an organization?

Answer 2

It emphasizes the need for structures as structuring forces, focusing on formal specifications that define tasks, responsibilities, and authority.

Question 3

What are organizational structures?

Answer 3

Rules that an organization establishes or develops over time to provide orientation for its members.

Question 4

What are formal and informal structures in an organization?

Answer 4

Formal Structures: Explicit rules and specifications for tasks and authority.

Informal Structures: Implicit hierarchies, role distributions, and unwritten rules formed through social interactions.

Question 5

How are culture and structure interrelated in an organization?

Answer 5

Structures shape culture, and culture influences the functioning of structures.

Culture includes fundamental understandings, values, and norms expressed in actions, decisions, and artifacts.

Question 6

Is organizational culture homogeneous? Why or why not?

Answer 6

No, subcultures emerge within groups, especially as specialization increases, forming unique languages, values, and understandings.

Question 7

What is the principle guiding the design of organizational structures?

Answer 7

“Structure follows strategy” to support strategy implementation and core processes effectively.

Question 8

How has the principle of “structure follows strategy” evolved?

Answer 8

1990s: Became “structure follows process” with business reengineering.

Strategic process management: “Process follows strategy”, ensuring alignment between strategy, processes, and structures.

Question 9

What are the four basic types of organizational structures?

Answer 9

1. Line-Staff Organization.
2. Matrix Organization.
3. Network Organization.
4. Process Organization.

Question 10

What is a Line-Staff Organization?

Answer 10

Groups similar activities under hierarchical line management.

Staff units add specialized functions.

Can be function-based or division-based for growth and flexibility.

Question 11

What is a Matrix Organization?

Answer 11

Structures by business units or customer groups with a primary dimension.

Challenge: Managing conflicts between dimensions (e.g., central departments vs. business units).

Question 12

What is a Network Organization?

Answer 12

Composed of independent units with great autonomy, managed centrally by a focal element.

Example: Holding companies focus on individual targets rather than centralized structures.

Question 13

What is a Process Organization?

Answer 13

Ensures standardized overall responsibility for processes for high quality and efficiency.

Challenge: Coordinating communication, work, and IT processes across functions.

Question 14

What is the challenge of tight coupling in process organizations?

Answer 14

Optimized “process engineering” and tight coupling of IT and communication processes may cause the organization to “freeze.”

Question 15

What factors influence the design of an organizational structure?

Answer 15

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).

Question 16

How does organizational structure vary across development phases?

Answer 16

Growth phase: Focus on markets, clear responsibilities.

Creative startup phase: Emphasis on open, interdisciplinary team structures

Question 17

What are economies of scale, and how do they affect structure?

Answer 17

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.

Question 18

How do learning effects influence organizational structure?

Answer 18

Higher specialization leads to cost and quality advantages.

Example: Hospitals group treatments by specialty to enhance surgeon efficiency and handle complications better.

Question 19

What are network effects in organizational design?

Answer 19

Focus on fast growth while maintaining cohesion.

Example: Franchising systems or flexible “production cells” in airlines.

Independent units integrate and coordinate for customer benefit.

Question 20

What are economies of scope, and how do they affect structure?

Answer 20

Align structures with customer processes to increase willingness to pay.

Example: Financial services with customer advisors coordinating all services or universities managing admissions centrally.

Question 21

Why do organizational structures often overlap?

Answer 21

Different forms of organization may coexist, such as:

• Customer-oriented activities as process organizations.
• Functional line-staff structures for other functions.

Question 22

What legal factors affect organizational structure?

Answer 22

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).

Question 23

How does the environment influence organizational structure?

Answer 23

Organizations must adapt to:

• Competitive strategies.
• Environmental developments.
• Changing stakeholder expectations.

Example: Transition from hierarchical military units to flexible networks in asymmetric warfare.

Question 24

What challenges arise from growth and specialization?

Answer 24

1. Increased hierarchical levels slow communication and decision-making.
2. Functional specialization can lead to silo thinking and fragmented organizations.
3. Management must bridge divisions and ensure integration.

Question 25

What is fragmentation in organizations?

Answer 25

Formation of operational "islands" where departments prioritize their own goals over overarching organizational objectives.

Question 26

How can organizations prevent fragmentation?

Answer 26

Use boundary-spanning tools (e.g., management models, business planning). Implement effective management and communication measures.

Question 27

Why might hierarchical levels introduce barriers?

Answer 27

Hierarchical levels develop unique identities and agendas. These barriers can impede collaboration and slow decision-making.

Question 28

How do functional departments contribute to silo thinking?

Answer 28

Employees align with their group's standards and jargon. Functional training and licensing can reinforce distinct departmental identities.

Question 29

What measures can address specialization-induced silos?

Answer 29

Management mediates between departments with differing priorities. Example: Balancing short-term KPI focus (controlling) with long-term goals (marketing).

Question 30

What are the smallest task-bundling units in an organizational structure?

Answer 30

Jobs

Question 31

What is the next level above jobs in an organizational structure?

Answer 31

Departments, which group jobs with similar or complementary activities.

Question 32

What can departments be combined into in larger organizations?

Answer 32

Divisions.

Question 33

What are the three key aspects that must be defined and coordinated at all organizational levels (job, department, division)?

Answer 33

1. Tasks 2. Competencies 3. Responsibilities

Question 34

How can tasks, competencies, and responsibilities at different levels be defined and coordinated?

Answer 34

Using function diagrams.

Question 35

What are function diagrams used for?

Answer 35

Assigning tasks to units and determining the powers of individual positions (e.g., planning, decision, codetermination, execution, withholding approval).

Question 36

What common schemes are used within function diagrams to assign roles?

Answer 36

RACI (Responsible, Accountable, Consulted, Informed).

Question 37

What is an important principle that function diagrams help verify?

Answer 37

Avoiding duplication of responsibilities.

Question 38

What are the two perspectives on a company provided by organizational structure and process organization?

Answer 38

1. Organizational structure defines the organizational framework. 2. Process organization regulates the work processes within that framework.

Question 39

When does process organization become important?

Answer 39

When the organizational structure complicates the execution of complex projects and tasks.

Question 40

How does process organization help in managing cross-departmental tasks?

Answer 40

By assigning individual processes to units and revealing dependencies and conditions in terms of time and substance.

Question 41

Name three examples of processes requiring structuring through process organization.

Answer 41

1. Granting building permits in public administration. 2. Planning and delivering a production plant in mechanical engineering. 3. Emergency intervention with follow-up treatment in a hospital.

Question 42

Name three classical instruments for process organization.

Answer 42

1. Bar charts. 2. Network planning technique. 3. Sequence planning.

Question 43

What do bar charts represent in process organization?

Answer 43

Processes and steps as horizontal bars on a time axis, often assigned to individual units.

Question 44

How does the network planning technique display processes?

Answer 44

As a graphical sequence of interlinked activities, showing dependencies between upstream and downstream operations.

Question 45

What are the two dimensions of every organization?

Answer 45

1. Formal dimension (e.g., hierarchies, official channels). 2. Informal dimension (e.g., emotional relationships, personal networks).

Question 46

Why does an organizational chart represent only part of organizational reality?

Answer 46

It depicts formal structures but not informal interactions and relationships.

Question 47

Provide an example of informal dependencies in an organization.

Answer 47

A subordinate captaining the local tennis team where their manager is a player, creating informal influence.

Question 48

What does the phrase "Culture eats Strategy for breakfast" mean?

Answer 48

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.

Question 49

What are external demarcation mechanisms in organizational culture?

Answer 49

Cultural or structural mechanisms that restrict information exchange with members outside the organization, such as business secrets.

Question 50

What are internal integration mechanisms in organizational culture?

Answer 50

Value concepts or terminology that form a corporate culture and differentiate it from other organizations.

Question 51

Why is identifying and shaping organizational culture important?

Answer 51

Because culture represents an organization's way of life, influencing how members handle topics and make decisions, and providing a common interpretive framework.

Question 52

How can organizational culture become visible?

Answer 52

Through "artifacts," such as office design, working hour expectations, or supply arrangements.

Question 53

What is Schein's model of culture levels?

Answer 53

A framework dividing culture into three levels: 1. Basic premises (fundamental assumptions). 2. Collective values (communicated values). 3. Artifacts (observable behaviors or physical symbols).

Question 54

What are basic premises in Schein's model?

Answer 54

Fundamental assumptions about the company's environment, function, purpose, and success factors, forming the implicit core of a culture.

Question 55

How are collective values described in Schein's model?

Answer 55

As the proclaimed or communicated values, often articulated in mission statements, representing shared beliefs and priorities.

Question 56

What are artifacts in Schein's model of culture?

Answer 56

Observable behaviors or visible symbols, such as office design or meeting rituals, that reflect the culture.

Question 57

What are Hofstede's six dimensions for describing cultures?

Answer 57

1. Power distance 2. Individualism 3. Masculinity 4. Uncertainty avoidance 5. Long-term orientation 6. Indulgence

Question 58

How do Scandinavian cultures differ in Hofstede’s typology?

Answer 58

They exhibit small power distance and low masculinity.

Question 59

How does Switzerland rank in Hofstede's typology?

Answer 59

It is characterized by high uncertainty avoidance and strong long-term orientation.

Question 60

What matrix did Deal and Kennedy propose for typologizing corporate cultures?

Answer 60

A matrix with two dimensions: 1. Risk propensity 2. Feedback speed

Question 61

What can the interaction of culture and structure demonstrate?

Answer 61

For example, a bureaucratic "process culture" can hinder the dynamics of a network organization.

Question 62

How can organizational culture be changed?

Answer 62

By closely examining artifacts, basic premises, myths, stories, and shared experiences, and by fostering collective reflection processes to establish new basic premises.

Question 63

What opportunity can arise from shared experiences like overcoming a crisis?

Answer 63

They can foster collective reflection processes that establish new basic premises and reshape organizational culture.

Question 64

Provide an example of a cultural change from a shared experience.

Answer 64

If a company overcame the coronavirus crisis through personal responsibility, this success logic could change the fundamental premises of the culture.

Question 65

Goals/Criteria of the internal organization are?

Answer 65

- 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)

Question 66

Which are the formal elements of an organization?

Answer 66

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

Question 67

What are the four characteristics of organization culture in the SGMM?

Answer 67

- 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

Question 68

What questions can be used to identify an organizational culture?

Answer 68

- 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)