Chapter 3: Organizational Context: Design and Culture

Question 1

The modern approach to organization theory and design consists of:

Answer 1

very flexible networks, and recognizes the interaction of information technology and people.

Question 2

Historical Roots: Chester Barnard: The Functions of the Executive: definition of formal organization

Answer 2

• as a system of consciously coordinated activities of two or more persons
• People, not boxes on an organization chart, make up a formal organization
• especially dissatisfied with the classical bureaucratic view that authority should come from the top down
• He maintained that authority really should come from the bottom up, rather than the top-down bureaucratic approach
• It was Barnard’s contention that the existence of a cooperative system is contingent on the human participants’ ability to communicate and their willingness to serve and strive toward a common purpose

Question 3

Modern Theoretical Foundation

Answer 3

• The first major development in organization theory was to view the organization as a system made up of interacting parts
• The next development in organization theory is the contingency approach.

Question 4

The Contingency Approach

Answer 4

• there is no single best way to organize
• The organizational design must be fitted to the existing environmental conditions
• organizations change through internal transformation and adaptation

Question 5

Natural selection—or Ecological approach

Answer 5

• challenges the contingency approach
• it is more a process of the “survival of the fittest”
• there is a process of organizational selection and replacement

Question 6

Information processing and organizational learning

Answer 6

• recent approaches to organization theory
• based largely on systems theory and emphasize the importance of generative over adaptive learning in fast-changing external environments

Question 7

Learning Organization

Answer 7

-represents contemporary organization theory and is
compatible with and is relevant to the new paradigm environment facing today’s organizations
- characterized by human-oriented cultural values:
1) everyone can be a source of useful ideas
2) promoting empowerment
3) learning flows up and down
4) new ideas are important and should be encouraged and rewarded
5) mistakes should be viewed as learning opportunities

Question 8

Single-loop learning

Answer 8

• improving the organization’s capacity to achieve known objectives
• routine and behavioral learning
• is learning without significant change in its basic assumptions

Question 9

Double-loop learning

Answer 9

• reevaluates the nature of the organization’s objectives and the values and beliefs surrounding them
• changing the organization’s culture
• the organization’s learning how to learn

Question 10

Generative learning involves

Answer 10

• creativity and innovation

- going beyond just adapting to change to being ahead of and anticipating change

Question 11

Creative Tension

Answer 11

• serves as a catalyst or motivational need to learn
• gap between vision and reality
• Questioning/inquiry
• Challenging the status quo
• critical reflection

Question 12

Systems Thinking

Answer 12

• Shared vision
• Holistic thinking
• Openness

Question 13

Culture facilitating learning

Answer 13

• Suggestions
• Teamwork
• Empowerment
• Empathy

Question 14

Senge’s Summary of Traditional Versus Learning Organizations

1) Determination of overall direction

Answer 14

• Traditional: Vision is provided by top management
• Learning: There is a shared vision that can emerge from many places, but top management is responsible for ensuring that this vision exists and is nurtured

Question 15

Senge’s Summary of Traditional Versus Learning Organizations

2) Formulation and implementation of ideas

Answer 15

• Traditional: Top management decides what is to be done, and the rest of the organization acts on these ideas.
• Learning: Formulation and implementation of ideas take place at all levels of the organization.

Question 16

Senge’s Summary of Traditional Versus Learning Organizations

3) Nature of organizational thinking

Answer 16

• Traditional: Each person is responsible for his or her own job responsibilities, and the focus is on developing individual competence.
• Learning: Personnel understand their own jobs as well as the way in which their own work interrelates with and influences that of other personnel.

Question 17

Senge’s Summary of Traditional Versus Learning Organizations

4) Conflict resolution

Answer 17

• Traditional: Conflicts are resolved through the use of power and hierarchical influence.
• Conflicts are resolved through the use of collaborative learning and the integration of diverse viewpoints of personnel throughout the organization

Question 18

Senge’s Summary of Traditional Versus Learning Organizations

5) Leadership and motivation

Answer 18

• Traditional: The role of the leader is to establish the organization’s vision, provide rewards and punishments as appropriate, and maintain overall control of employee activities
• Learning: The role of the leader is to build a shared vision, empower the personnel, inspire commitment, and encourage effective decision making throughout the enterprise through the use of empowerment and charismatic leadership.

Question 19

Horizontal Organization Guiding Principles

Answer 19

1. Organization revolves around the process, not the task.
2. The hierarchy is flattened
3. Self-managed teams
4. Customers drive performance
5. Team performance is rewarded
6. Supplier and customer contact is maximized
7. All employees need to be fully informed and trained.

Question 20

Hollow Organization

Answer 20

lies heavily on outsourcing, enabling it to maintain low staffing levels while capitalizing on the competences of partner organizations

Question 21

Modular Organization

Answer 21

when just parts of the product or service are outsourced

Question 22

Greenfield redesign

Answer 22

• break completely from the classical structure and

establishing a totally different design

Question 23

Rediscovery redesign

Answer 23

• return to a previously successful design by eliminating unproductive structural additions and modifications

Question 24

Network design

Answer 24

• the firm concentrates on where it can add the greatest value in the supply chain, and it outsources to upstream and/or downstream partners who can do a better job
• Another approach require internal units of the firm to interact at market prices—buy and sell to each other at prices equal to those that can be obtained by outsourcing partners.

Question 25

Virtual Organization

Answer 25

• represents the new environment and the partnering, alliances, and outsourcing arrangements found in an increasing number of global companies. Key attributes:
  1) Technology
  2) Opportunism
  3) No borders
  4) Trust
  5) Excellence

Question 26

Edgar Schein’s definition of Organizational Culture

Answer 26

• a pattern of basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration
• that has worked well enough to be considered valuable and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems

Question 27

Organizational culture characteristics

Answer 27

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1. Observed behavioral regularities (common language, terminology)
2. Norms (guidelines on work ethic)
3. Dominant values (major values that the organization advocates and expects the participants to share)
4. Philosophy (policies on how customers & employees are treated)
5. Rules (related to getting along in the organization)
6. Organizational climate (overall “feeling”, the way people interact, how people conduct themselves with customers)

Question 28

subculture

Answer 28

• a set of values shared by a minority, usually a small minority, of the organization’s members
• typically are a result of problems or experiences that are shared by members of a department or unit

Question 29

How Organizational Cultures Start

Answer 29

1. A single person (founder) has an idea for a new enterprise.
2. The founder brings in one or more other key people and creates a core group that shares a common vision with the founder. That is, all in this core group believe that the idea is a good one, is workable, is worth running some risks for, and is worth the investment of time, money, and energy that will be required.
3. The founding core group begins to act in concert to create an organization by raising funds, obtaining patents, incorporating, locating space, building, and so on.
4. At this point, others are brought into the organization, and a common history begins to be built

Question 30

Practices to maintain a culture

Answer 30

1. careful selection of entry-level candidates
2. placement on the job (training/hazing)
3. job mastery (reinforced field experience)
4. measuring and rewarding performance
5. Adherence to important values
6. Reinforcing the stories and folklore
7. Recognition and promotion

Question 31

Culture clash in M&A: Three areas

Answer 31

1. Structure: the size, age, and history of the two firm
2. Politics - power and managerial decision making
3. Emotions - The personal feelings, the “cultural contract” that individuals have bought into to guide their day-to-day thoughts, habits, attitudes, commitment, and patterns of daily behavior.

Question 32

Guidelines for Cultural Change

Answer 32

1. Assess the current culture.
2. Set realistic goals that impact the bottom line.
3. Recruit outside personnel with industry experience, so that they are able to interact
   well with the organizational personnel.
4. Make changes from the top down, so that a consistent message is delivered from all management team members.
5. Include employees in the culture change process, especially when making changes in rules and processes.
6. Take out all trappings that remind the personnel of the previous culture.
7. Expect to have some problems and find people who would rather move than change with the culture and, if possible, take these losses early.
8. Move quickly and decisively to build momentum and to defuse resistance to the new culture.
9. Stay the course by being persistent

Question 33

The Socialization Process

Answer 33

• consists of meticulous attention to measuring operational results and to rewarding individual performance.
• These systems are comprehensive and consistent, and they focus on those aspects of the business that are most crucial to competitive success and to corporate values