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Bus 478 > Chapter 12 > Flashcards

Chapter 12 Flashcards

1
Q

What is organizational structure

A
  1. Location of decision making responsibilities
  2. Formal division of the company into subunits
  3. Establishment of integrating mechanisms to coordinate the activities of subunits
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2
Q

What are the components of organizational structure

A
  1. Structure
  2. Control and incentives
  3. Processes
  4. Culture
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3
Q

What are controls

A

Metrics used to measure the performance of the subunits and make judgement about how well managers are running those subunits

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4
Q

What are incentive

A

Devices used to encourage desired employee behaviour and are very closely tied to performance metrics

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5
Q

What are organizational processes

A

Refers to the manner in which decisions are made and work is performed within the company

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6
Q

What is culture

A

Norms and value systems that are shared among employees of the company

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7
Q

What is human capital

A

Employees

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8
Q

What are the dimensions of organizational structure

A
  1. Vertical differentiation
  2. Horizontal differentiation
  3. Integrating mechanisms
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9
Q

What is centralization (Vertical Differentiation)

A

A condition where decision making authority is concentrated at a high level in the management hierarchy

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10
Q

What is decentralization

A

Condition where decision making authority is vested in lower level managers or other employees

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11
Q

What are the arguments for centralization

A
  1. Can facilitate coordination
  2. Help ensure that decisions are consistent with the companys objectives
  3. Can avoid duplication of activities that occur when similar activities are carried
  4. Can give top level managers the means to bring about needed major organizational changes
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12
Q

What are arguments of decentralization

A
  1. Top management can become overburdened when decision making authority is centralized
  2. Give employees more responsibility, they will work harder
  3. Permits greater flexibility - more rapid response
  4. Can result in better decisions
  5. Can increase control and be used to establish autonomous self contained units
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13
Q

When does centralization work best

A
  1. Overall company strategy
  2. Financial expenditures
  3. Financial objectives
  4. Legal issues
  5. Realization of economies of scale
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14
Q

When does decentralization decisions work best

A
  1. Sales decisions
  2. Local adaptations
  3. Environment characterized by high uncertainty and rapid change
  4. Functional decisions related to production, marketing, R&D, human resource
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15
Q

What are tall hierarchies

A

Lots of layers of management

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16
Q

What are flat hierarchies

A

Few layers

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17
Q

What are span of control

A
  1. Number of direct reports that the manager has
    1. Nature of work being supervised
    2. Extent to which the performance of subordinates are visible
    3. Extent of decentralization within a company
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18
Q

What are the problems with tall hierarchies

A
  1. Tend to omit data when transmitting information
  2. Lead senior managers making important decisions based on inaccurate information
  3. Expensive
  4. Difficult to change to protect their turf and jobs
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19
Q

What is delayering

A

An attempt to reduce number of levels of management to boost a companys performance

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20
Q

What are the structural forms

A
  1. Functional structure
  2. Multidivisional Structure
  3. Matrix structure
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21
Q

What are the functional structure

A

Division of labour with different functions focusing on different tasks

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22
Q

What are the aspects of functional structure

A
  1. Works well for a company in a single line of business
  2. Harder to assess if the business is performing well or poorly
  3. Lack of accountability because there is no individual or management team responsible for the performance of each business
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23
Q

What are the multi-divisional structure

A

The company is divided into different divisions, each responsibile for a distinct business area

24
Q

What are the aspects of multi divisional structure

A
  1. Set up as a self contained, largely autonomous entitiy
  2. Responsibility for functional decisions and business level strategy is decentralized to the divisions
  3. Performance is highly visible
25
Q

What is the matrix structure

A

Team reports to multiple leaders

26
Q

What are the aspects of matrix structure

A
  1. Lead to conflict or power struggles
  2. Difficult ascertain accountability because one side can always blame others
  3. Matrix structure can work providing that there are clear lines of responsibility
27
Q

What are formal integrating mechanisms

A
  1. Used to coordinate subunits vary in complexity from simple, direct contact and liaison roles, to teams, to a matrix structure
  2. Greater need for coordination between subunits
  3. More formal integrating mechanisms
28
Q

What is knowledge network

A
  1. System for transmitting information within a company that is based not on formal organizational structure button informal contracts between managers
  2. Managers in different locations are linked together
29
Q

What are organization controls

A

Process where managers regulate the activities of individuals and units so that they are consistent with goals and standards of a company

30
Q

What are methods of control

A
  1. Personal Controls
  2. Bureaucratic Controls
  3. Output Controls
  4. Incentive Controls
  5. Market Controls
  6. Control Through Culture
31
Q

What are personal controls

A
  1. Controls by personal contract with and direct supervision of subordinates
  2. Consists of making sure that employees and units behave consistently with goals
32
Q

What are the limitations of personal control

A
  1. Excessive supervision can be demotivating and build resentment
  2. Costly because managers must devote considerable time and attention
  3. Starts to breakdown when a company grows in size and complexity
33
Q

What is bureaucratic controls

A

Control through formal system of written rules and procedures, prescribes what employees and units can and cannot do

34
Q

What are output controls

A
  1. Sets goals for units or employees and monitoring their performance against these goals
  2. Performance - reward program
  3. They help facilitate decentralization and give managers greater autonomy
  4. Managers must achieve these goals consistently with companys values and standards
35
Q

What are market controls

A
  1. Involve regulating the behaviour of employees and units within a company by setting up internal market for valuable resources such as capital
  2. Act as internal investment bank, allocating capital funds between the completing claims of the different product divisions based upon an assessment of their future performance
36
Q

What are incentive controls

A
  1. Devices used to encourage and reward appropriate employee behaviour through incentives such as bonuses
  2. Closely tied with performance metrics
  3. Designed to facilitate self control and peer control
37
Q

What are organizational culture

A

Values, norms and assumptions that are shared among employees

38
Q

What are values

A

Abstract ideas about what employees believe to be good, right and desirable

39
Q

What are norms

A

Social rules and guidelines that prescribe the appropriate behaviour in situations

40
Q

What are expectations of organizational culture

A
  1. Influence the way employees behave
  2. Influence decisions
  3. Influence that the company pays attention to
  4. Influence companys strategy and performance
41
Q

What is organizational processes

A
  1. Formulating strategy
  2. Allocating resources
  3. Evaluating new product ideas
  4. Handling customer inquiries and complaints for improve product quality
  5. Evaluating employee performance
42
Q

What is a single business company

A

Organized along functional lines

43
Q

What does the need for integration for single business depend on

A
  1. Business level strategy of the company
  2. Nature of the environment where the company competes
  3. The need is for companies that have product development and innovation
44
Q

What are bureaucratic controls (LOW)

A

Forms of budget used to allocate financial resources to each function and control spreading by functions

45
Q

What are output controls (LOW)

A

Used to assess how well a function is performing

46
Q

What are low integration

A

Minila integration

47
Q

What are high integration

A

Company that faces an uncertain, highly turbulent, competitive environment where rapid adaptation to changing market conditions are required and integration is needed to survive

48
Q

What are bureaucratic controls (HIGH)

A

Used for financial budgets

49
Q

What are output controls (HIGH)

A

Applied to the different functions and cross functional product development teams

50
Q

What are performance ambiguity

A

Be an issue when it is difficult to identify precision the reason for high or low performance of a team

51
Q

What are multi business company

A
  1. Organizes itself along divisional lines
  2. Extent of integration between functions within divisions may differ from division to division depending on the business level strategy
52
Q

What are related diversification

A

Strategy that tries to realize economies of scope and need for integrating mechanisms

53
Q

What are unrelated diversification

A

Company operates well with minimal or no integrated mechanisms between divisions

54
Q

What are the challenges for a diversified company pursuing a strategy related to diversification

A

Leverage competencies across product divisions and realize economies of scope

55
Q

What are the 2 control problems

A
  1. Have to find control mechanisms that induces divisions to cooperate with each other
  2. Need to find a way to deal with performance ambiguities when divisions are tightly coupled with each other
56
Q
A

Bus 478 (12 decks)

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