Chapter 4.2 and 5

Question 1

Jello effect

Answer 1

the situation where a small change in one part of the organization requires
change and adjustment throughout the organization. E.g., in a matrix
configuration, a change in one function or project frequently requires adjustments
in a number of other functions and projects.

Question 2

org complexity

Answer 2

The practical design questions relating to organizational complexity include: the width of specialization for the firm, the span of control for the firm, the delayering of the firm to eliminate middle management, the scope in a divisional configuration, and the limitation on the number of functions and divisions in the matrix configuration.

Question 3

4 types of org complexity

Answer 3

blob, tall, flat, and symmetric

Question 4

blob

Answer 4

low on vertical and horizontal differentiation

• if the firm does not formally divide its work into subunits;
• has little specialization of task;
• the firm can be quite flexible and quick to respond to ongoing changes;
• very loose or non-existent job descriptions;
• requires decision-making for new situations on a continuing basis, where the executive can become overloaded and not be able to give adequate attention to the activities;
• can also be confusing to customers or to newcomers who join the organization, since it is not clear who does what, or where one should go for specific types of information.

Question 5

tall

Answer 5

low on horizontal differentiation and high on vertical differentiation

• the firm has a large middle management which focuses on information processing – taking directions and information from the top and making it precise for lower levels in the hierarchy; and taking detailed information from the bottom and summarizing and interpreting it for the top executives.
• the down and up processes involve a good deal of information processing which takes managerial time and can lead to delay;
• the span of control is limited as the information processing demands on the middle managers can be quite high;
• the inter-level vertical information transferal is usually large, involving frequent interaction of detailed information.
• if an additional function is added, it must be coordinated across all the functions;
• the addition of one more function increases the information processing demands nonlinearly. This limits the number of direct reports to a few; most firms have five to seven functions;

Recently, many firms have shortened their hierarchy, eliminating middle management levels in the firm. This is frequently called “delayering.” When a level is removed, the connections between the level above and the level below must also be changed.

Question 6

flat

Answer 6

high on horizontal differentiation and low on vertical differentiation

• fewer middle managers (or subunits) to coordinate between the top executives and the lower levels in the organization;
• usually middle managers focus on resource allocation, general policy, and finance (other issues can be innovation, R&D, human resources – all of which involve policy and strategy);
• the information is aggregated and minimal;
• short-term information exchanges focus on financial goals and cash flows;
• long-term information exchanges focus on capital budgets and technology planning;
• the scope of the firm work across subunits can be quite varied, especially if there are no operational connections among them;
• the span of control can be wide if the focus of information flow is on policy, not detailed operations;

A major advantage: each unit has autonomy to focus on its own work. On the other hand, the executive level of the organization bears the burden of coordinating among these subunits, and they can get out of synch, lack coordination, leading to inefficiencies for the firm as a whole.

Question 7

symmetric

Answer 7

high on horizontal differentiation and high on vertical differentiation

• the organization’s work is broken down into many task specialties as well as many vertical reporting levels;
• horizontally breaking down tasks into smaller tasks means that work can be done simultaneously in the horizontal subunits;
• helps to facilitate organizational effectiveness;
• a middle level (or perhaps multiple middle levels) are created that aggregate work from bottom to top and facilitate information flow from top to bottom;
• the information-processing requirements of the symmetric organization are very high because the coordination demands are high both horizontally and vertically throughout the firm.

Question 8

blob fits

Answer 8

reactor strategy, calm environment, simple config

Question 9

tall fits

Answer 9

efficiency goal,
defender strategy,
varied env,
functional config

Question 10

flat fits

Answer 10

effectiveness goal,
prospector strategy,
locally stormy env,
divisional config

Question 11

symmetric fits

Answer 11

both eff as goals,
analyzer with/without innovation,
turbulent env,
matrix config

Question 12

Structures for spanning geography

Answer 12

The extent to which a firm locates based on optimal sourcing vs a particular geographic boundary, and the extent to which it locates to yield local responsiveness vs global standards and economies of scale.

Question 13

Optimal sourcing

Answer 13

the decision to locate operations in the place in the world that brings the greatest advantage to the firm in terms of customer contract, cost efficiency, HR skill needed, or other objective.

Question 14

Local responsiveness

Answer 14

the decision to distribute work in many locales versus consolidating work in one or a few centralized locations. Distributing work to many locales maximizes your firm’s flexibility to complete work tasks any time, any place.

Question 15

if your firm pursues exploitation, you should organize work to be high in

Answer 15

optimal sourcing

Question 16

your firm pursues exploration, you should organize work to be high in

Answer 16

responsiveness

Question 17

The typology is based on the seminal work of Bartlett and Ghoshal:

Answer 17

global, international, multi-domestic and transnational.

Question 18

global

Answer 18

low on both optimal sourcing and local responsiveness

• if your organization is not organized to be locally responsive or to yield optimal sourcing but instead concentrates its work activities in one locale
• centralized approach to organizing and thus yields the advantage of high centralization of decisionmaking and work practices that are established by the “home base” of operations
• offering similar products or services worldwide
• work practices are consistent with the corporate HQ
• akin to the simple configuration
• There may be customization of products and services to meet the needs of specific customers, but the arrangement of this work is controlled at the locale

Example: Software company

Question 19

international

Answer 19

high optimal sourcing and low responsiveness

• move beyond the home base of operations to create “centers of excellence,” or hubs for each major product or service
• work is located as close as possible to the resource the organization needs to do the work
• products and services tend to be standardized rather than customized to location
• the international organizational design is like a functional form in that configuration is based on concentrating expertise, or skills, as a way of managing work
• the organization distributes work geographically, away from corporate headquarters, but corporate headquarters maintains a great deal of authority
• the organization is “tall” rather than flat; that is, the vertical differentiation is high

Example: oil industry

Question 20

multi-domestic

Answer 20

low optimal sourcing and high responsiveness

• If a firm takes a decentralized, geography-based approach to organizing work
• customizes operations to specific countries or regions, offering unique products or services to meet local preferences
• is like a divisional form
• Work is organized to exploit local opportunities, especially the cultural, political, and geographic opportunities associated with a given locale
• Divisions or other operations are located in different locales to yield local responsiveness to customers, not to yield optimal sourcing
• can be very effective for the firm that is entering markets which are very different from the home locale
• flat in shape, meaning that work practices will vary as a function of locale (the locale can be country or region)
• supports growth via exploration of new products and services
• good choice of organizational design if the source of growth is geographically based
• involves significantly more investment for the otherwise corporatecentered firm
• requires that the firm establish local presence, develop employees to manage in that locale, and so on
• Over time, less successful local operations can be shut down, while those that are more successful can be allowed to grow
  Example: 3M

Question 21

transnational

Answer 21

high on both optimal sourcing and responsiveness

• blends the international and multi-domestic structures to yield both the location advantages of regional or country-based design and the economic efficiencies of optimal sourcing
• some operations are located close to needed resources; but location decisions also are made such that the firm has presence in all areas of the world that are of strategic importance
• Some operations are centralized in the home locale; some are optimally sourced, wherever those sources are located; and others are distributed among country or regional operations
• This design makes sense if the organization has diverse and conflicting strategic needs and/or high variation in the business environments the firm confronts as it moves outside of its home country.
• The transnational approach to your organizational design means that you disperse subunits, develop specialized centers of operation, and then link these through effective management of interdependent relationships
• the most complex distributed design to manage because some aspects of the firm’s work are region-centric whereas other aspects of the firm’s work are resource-centric. Like the matrix organization, management of the transnational organization requires a combination of centralized and decentralized decision-making
  Example: Unilever

Question 22

Knowledge exchange structures are

Answer 22

informated, network, cellular, and ad hoc communications

Question 23

informated

Answer 23

high IT-infused, low virtualization

• computer technology is heavily embedded in the design and monitoring of work processes such that tasks can be streamlined, closely linked with one another, and continually managed for improvement in quality and cost control
• Via computer technology, events and processes are made visible and measurable, making redesign and customization of work possible
• increases the intellective demands of work, as well as the possibilities for creative ways of rearranging and linking work activities
• possible in a wide range of industries from manufacturing to the service sector

Question 24

ad hoc communications

Answer 24

low IT-infused, low virtualization

• rely on person-to-person contacts or small groups (two to ten people) whose members are all from inside the organization (or organizational unit) to share knowledge on an as-needed basis
• Small, loosely created groups of people provide knowledge-based innovation that is ground-up, meaning that it comes from the people closest to the work at hand. These informal groups typically are temporary
• They usually are appointed by management, work with a fair amount of autonomy and may vary in the methods used to track their progress and share results with those outside of the group.
• manage knowledge exchange on an as-needed basis; members adjust the way they organize work and report to one another and their boss depending on the nature of the particular task at hand
• a leader’s preferences for managing work may have a high degree of influence on exactly how the work is organized
• the organization of work – how knowledge is shared and tasks are completed – is put together on the fly, to meet the particular work needs
• very effective way to generate and transfer information to meet the specific knowledge needs of a given project, event, or client

Question 25

cellular

Answer 25

low IT-infused, high virtualization

• small, autonomous groups or business units that largely self-govern and can grow, reproduce, and form relations with other units as needed
• based on the biological metaphor of a living cell
• inward focus for knowledge exchange within teams or units, coupled with boundary-spanning across cells and into the marketplace in order to gain access to external sources of knowledge.
• competes on the ability of cells to import and export knowledge while harboring information inside for creative or competitive benefit
• compared to informated organizations, cellular organizations will have more variability in the process of knowledge exchange within subunits
• Compared to ad hoc communicationbased organizations, cellular organizations develop extensive relationships with external parties for knowledge sustenance
• rely heavily on rich forms of interaction between people for knowledge exchange
• Information technology may be used to coordinate work, but systems will not be consistent or perfected in the sense of being fully engineered for smoothness and quality control
• flexibility in the way knowledge is exchanged is important
• High interpersonal contact, such as conferences, seminars and face-to-face meetings, may be used to facilitate tacit knowledge sharing.
• The goal is to promote an entrepreneurial mindset with a focus on innovation and growth within the cell and the larger organization of which it is a part.
• tend to be suitable for research firms and divisional forms where highly varied approaches to knowledge development and exchange are needed across the subunits.

Question 26

network

Answer 26

high IT-infused, high virtualization

• links units within the firm with one another and, further, develops active linkages between internal units and external organizations to meet the organization’s knowledge needs
• Networks often take the form of strategic alliances, research partnerships, and consortia
• nearly impossible to create without the use of modern information technology
• both product and specialty intense
• lacks symmetry or balance in its structure
• Information technology is used to link units in multiple directions, not just vertically or horizontally
• the network can operate as a ring, a star, or a web of ties among the subunits of the firm.
• Resources, people, and ideas flow in all directions.
• Specific points of exchange can be made between the subunits and with external parties “that matter” to the business need.
• network ties are formed and managed intelligently, putting knowledge exchange when and where it’s needed
• combines the information-intensity of the informated firm with the boundary-spanning approach to knowledge exchange found in the cellular organization

Question 27

fit between strategies and knowledge exchange

Answer 27

ad hoc communications + reactor

informated + defender

cellular + prospector

network + analyzer with / without innovation