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.
