Chapter 11 Flashcards
concerns the organization,
coordination, and integration of how work gets done
• Key to gaining and sustaining a competitive advantage
STRATEGIC IMPLEMENTATION
Managers attempt to coordinate implementation efforts (work)
and motivate employees through ____
ORGANIZATIONAL DESIGN
____ is the process of creating, implementing,
monitoring, and modifying the structure, processes, and procedures of an
organization
• The goal is to allow managers to translate strategy into reality
ORGANIZATIONAL DESIGN
Implies that organizational design must be flexible enough to accommodate the
formulated strategy and future growth/expansion
STRUCTURE FOLLOWS STRATEGY
Three (3) levers of organizational design
Structure – determines how work efforts of individuals and teams are orchestrated
• Culture – shared norms and values of organizational members
• Control systems – internal governance mechanisms used to align incentives of
employees with owners
___ determines how the work
efforts of individuals and teams are orchestrated and how
resources are distributed
ORGANIZATIONAL STRUCTURE
Four (4) key elements of an organizational structure
- Specialization
- Formalization
- Centralization
- Hierarchy
describes the degree to which a task is divided into separate jobs (i.e., degree of labor division)
SPECIALIZATION
captures the extent to which employee behavior is
steered by explicit and codified rules/procedures
FORMALIZATION
refers to the degree to which decision making is
concentrated at the top of the organization
CENTRALIZATION
determines the formal, position-based reporting lines and
stipulates who reports to whom
HIERARCHY
a firm’s
resistance to change the status quo
ORGANIZATIONAL INERTIA
the founder(s) tend to make all the important decisions and run the day-to-day operations
SIMPLE STRUCTURE
groups employees into distinct
functional areas based on domain expertise
A FUNCTIONAL STRUCTURE
Drawbacks to functional structure
• Can lack effective communication channels between departments
• E.g., R&D manager may not effectively communicate with marketing,
misunderstanding the design changes that consumers demand
• Puts more pressure on CEO to coordinate effectively
• One remedy might be to set up temporary CROSS-FUNCTIONAL
TEAMS that include members from different functional areas
• Difficult to address a higher level of diversification, which often comes
from further growth
• Thus, managers may find it necessary to again restructure
consists of several distinct
strategic business units (SBUs)
The MULTIDIVISIONAL FORM
A MATRIX STRUCTURE
combines the M-FORM and FUNCTIONAL
structures
• Each SBU is organized under a single corporate office (M-form), but a second
layer of structure is provided by either:
• Geographic region (i.e., North America, South America, etc)
• Functional area (i.e., R&D, marketing, accounting, etc)
• Product/service offering (i.e., product/service 1, 2, 3, etc)
• Allows firms to gain benefits from M-form (i.e., domain expertise, economies
of scale, efficient information processing) with benefits of functional structure
(i.e., responsiveness and decentralized focus)
Drawbacks of a Matrix structure
Difficult to implement
• Reporting structures are not very clear (e.g., employees have >1 boss)
• Can slow decision-making and increase administrative costs
___ describes the collectively shared values and
norms of an organization’s members
ORGANIZATIONAL CULTURE
Employees learn and effect a firm’s culture through ___
whereby values and norms are internalized
SOCIALIZATION
Culture is expressed through ___
Artifacts
Artifacts
elements of the firm
Rules of conduct
written rules defining appropriate behavior
Vocabulary
the language, acronyms, jargon, slang, signs, slogans, songs, etc
that define the organization
Rituals
rites, ceremonies, and taboos
Myths and stories
—the history, saga, myths, and legends of the firm
FOUNDER IMPRINTING
the influence of the founder(s) on the definition and
shape of a firm’s culture
How does a culture change?
- Very difficult to change, especially over time, BUT CAN CHANGE WHEN:
- New leadership emerges
- Merger or acquisition
STRATEGIC CONTROL-AND-REWARD SYSTEMS
are internal
governance mechanisms put in place to align the incentives of
principals (owners) and agents (employees)
INPUT CONTROLS
seek to define and direct employee
behavior through a set of explicit, codified rules and standard
operating procedures
OUTPUT CONTROLS
seek to guide employee behavior by
defining expected results (outputs)
