chapter 15- the organization of int business

Question 1

organizational architecture definition

Answer 1

totality of a firms organization

Question 2

what is organizational architecture made up of

Answer 2

• organizational structure
• control systems/incentives
• processes, organizational culture and people

Question 3

organizational structure (organizational architecture)

Answer 3

• the formal division of the organization into subunits
• centralized or decentralized decision making

Question 4

control systems/incentives (organizational architecture)

Answer 4

• measure performance- make judgments reward behavior

Question 5

processes, organizational culture and people (organizational architecture)

Answer 5

process: how decisions are made/work performed
organization culture: shared norms or values
people: recruit, compensate and retain

Question 6

primary reason for organizational architecture

Answer 6

to be profitable

to be profitable
- must be internally consistent
- must fit with strategy
- strategy and architecture must be consistent

strategy and arch go hand in hand

Question 7

what is meant by organizational architecture

Answer 7

vertical differentiation
horizontal differentiation
integrating mechanisms

Question 8

vertical differentiation

Answer 8

the location of decision-making responsibilities within a structure: where is power concentrated should a country have centralized or decentralized decision making

Question 9

horizontal differentiation

Answer 9

the formal division of the organization into subunits

Question 10

integrating mechanisms

Answer 10

the mechanisms for coordinating subunits

Question 11

centralized decision making (vertical differentiation)

Answer 11

• facilitates coordination
• ensures decisions are consistent with the organizations objectives
• avoids duplication of activities

need this in military

Question 12

decentralized decision making (autonomy) (vertical differentiation)

Answer 12

• relieves the burden of centralized decision making
• has been shown to motivate individuals
• permits greater flexibility
• CAN result inn better decisions

we generally like autonomy… we self direct our efforts (no boss leaning over shoulder)

Question 13

horizontal differentiation- functional structure

Answer 13

• most firms begin with no formal structure but later split functions reflecting the firm’s value creation activities- functional structure (smaller organizations)

functions are coordinated and controlled by top management
decision making here is centralized

Question 14

horizontal- product divisional structure

Answer 14

as we grow, start to have product division and in each product division you have functional areas
starting to get more important to organize by product line and then function `

Question 15

international division (when firms expand globally)

Answer 15

as companies begin to expand their firms internationally, challenges for conflict and coordination between domestic and foreign operations such as:
culture, language, time zones, whose in charge

Question 16

as company gains traction internationally, start to see worldwide product groupings

Question 16

worldwide product division structure

Answer 16

adopted by firms that are reasonably diversified

• allows for worldwide coordination of value creation activities of each product division
• helps realize location and experience curve economies
• does not allow for local responsiveness (under this structure product is at top and not bottom meaning less opportunity for local responsiveness)

Question 17

worldwide area structure

Answer 17

• favored by firms with low degree of diversification and aa domestic structure based on function
• divides the world into autonomous geographic areas
• decentralizes operational authority
• very useful bc facilitates local responsiveness
• can result in a fragmentation of the organization (how does north america coordinate with south america so a little bit of conflict with the areas)

Question 18

global matrix structure

Answer 18

tries to minimize the limitations of the worldwide area structure and the worldwide product divisional structure
(more than one boss creating conflict bc who do I listen to)

• allows for differentiation along two dimensions- product division and geographic area
• has dual decision making- product division
• can result in conflict between areas and product divisions
  La rosas least fav cuz very difficult

Question 19

subunit integration

Answer 19

informal mechanisms called:

a knowledge network `

Question 20

knowledge networks

Answer 20

network for transmitting info within an organization that is baed not on formal organizational structure but on informal contacts between managers within an enterprise and on distributed information systems
knowledge networks are INFORMAL MECHANISMS which allow information to be shared

Question 21

Subunit integration

Answer 21

from easiest to most complex:

• direct contact
• liaison role (individuals who go back and forth, make sure info well communicated)
• teams
• matrix structures

basically how are we going to integrate and make sure different divisions talk to each other

Question 22

types of control systems (4 kinds)

Answer 22

output controls
cultural controls
personal controls
bureaucratic controls

Question 23

output controls

Answer 23

setting goals for subunits to achieve and expressing those goals in terms or objective performance metrics- compare actual performance against targets (measurable goals, profibility goals, number of new clients, share the market etc)

they are the most common

Question 24

cultural controls

Answer 24

exist when employees “buy into” the norms and value systems of the firm- strong cultures implies less need for other forms of control

hardest to implement and most challenging to put in place

Question 25

personal controls

Answer 25

personal contact with subordinates (small firms)

Question 26

bureaucratic controls

Answer 26

a system of rules and procedure that directs the actions of subunits- budgets and capital spending rules

as organization gains in size, level of bureaucracy impacted

Question 27

performance ambiguity

Answer 27

exists when the causes of a subunits poor performance are not clear
aka not sure what to do, when managed or driven by organization that might be far away

• is common when a subunits performance is dependent on the performance of other subunits
• is lowest in firms with a localization strategy
• is higher in international firms

Question 28

syntehesis (look at vid 43 mins in

Question 29

graham westin video

Answer 29

does great job talking about culture
feeling connected
are aligned with the corporate purpose
“be valued members of a winning team on an inspired mission”

Question 30

sample questions

Answer 30

T/F- a centralized organization allows managers to respond to environmental changes more quick than in a decentralized organization

FALSE
centralized is vertical

Question 31

sample question

Answer 31

T/F- the need for coordination between units is least on firms pursuing a localization strategy

TRUE
localize stratagies are where we can customize, be locally responsive, have autonomy

Question 32

sample questions

Answer 32

T/F- when business have a transnational strategy that includes being locally responsive and low cost performance ambiguity is low

FALSE
performance ambiguity here is really high bc trying to be both locally responsive and low cost, harder to do