Environment, Structure, and Strategy - 12 Flashcards
What does form and function mean in “Form follows function”?
Form = Structure
Function = Purpose
What is Organizational Structure?
The manner in which an organization divides its labour into specific tasks and achieves coordination among these tasks
What does an org have to do to achieve it’s goals?
Divide labour among its members
Coordinate what has been divided
What are the 2 dimensions of division of labour?
Vertical Division of Labour
Horizontal Division of Labour
What is Vertical Division of Labour?
Assigning authority for planning & decision making
Vertical job specialization
What school is vertical division of labour?
School 1
What 2 themes are a part of vertical division of labour and explain
Autonomy & Control : Domain of authority is decreased as the # of levels in the hierarchy increases
Communication: With more levels, communiation & coordination are harder to achieve
Horizontal Division of Labour
They group the basic tasks that must be performed into jobs and then into departmens so that the org can achieve its goals
What are the 2 themes that are apart of Horizontal Division of Labour and explain
Job Design
Differentiation: As Horizontal increases, differentiation too
What are the 6 critical structural elements of all companies
Job Specialization
Departmentation/Differentiation
Integration/Coordination
Span of Control/ Flat vs Tall
Formalization
Centralization
What is Differentiation
Tendency for managers in seperate units, functions or departments to differ in terms of goals, time spands, and interpersonal styles
What is
Departmentation
The assignment of jobs to departments
What is Functional Departmentation?
Employees with closely related skills and responsibilities are assigned to the same department
What are advantages of Functional Departmentation
- Efficiency
- Enhanced communication
- Enhanced career ladders & training opportunities
- Easier to measure and evaluate performance
- Resources can be allocated more efficiently
- All talking same language; beware that lingo is diff
- Because in same departments
What are disadvantages of Functional Departmentation
- High degree of differentiation between departments
- Leads to poor coordination and slow response to org problems
- Conflict between departments
- Therefore need for coordination
- We/They
What is Product Departmentation
Departments are formed on the basis of a particular product, product line, or service.
E.g. Shampoo division
What are the advantages of product departmentation?
- Better coordination and communication among functional specialists who work on particular product
- Can be avaluated as profit centers
- Can serve the customer better
- All functional specialists work on a specific
- Answers can be more direct
What are the disadvantages of product departmentation?
- Economies of scale are threatened
- Inefficiency
- Professional development might suffer
- Might occur if relatively autonomous product-oriented departments are not coordinated
- Suffer without a critical mass of professionals working in the same place at the same time
What is economies of scale?
Sharing across the division
What is Matrix Departmentation
Employees remain members of a functional department while also reporting to a product or project manager.
Attempt to capitalize on strengths of other forms
Advantages of matrix departmentation?
- Provides a degree of balance between the demands of the product or project and the ppl who do the work
- Flexible
- Better communication among the representatives of the various functional areas
- Elegant; a lot better outcomes
- U can be movied around as project flow dictates and new products are added
Disadvantages of matrix departmentation?
- Managers (product and functional) may not see eye to eye
- Can create conflict (role conflict and stress)
- Hard to report back to the managers
- Because employees must report to both product/project and functional managers
What is geographic departmentation?
Relatively self-contained units deliver an organization’s products or services in a specific geographic territory
Advantages of geographic departmentation
- Shortens communication channels
- Caters to regional tastes
- Some local control to clients and customers
Disadvantages of geographic departmentation
- Parallel those for product departmentation
Customer Departmentation
Relatively self-contained units deliver an organization’s products or services to specific customer groups
Advantage of Customer Departmentation
- Better service to customers through specialization
Disadvantage of Customer Departmentation
- Parallel those for product departmentation
What is Hybrid Departmentation?
A structure based on some mixture of functional, product, geographic, or customer departmentation
Hybrids attempt to capitalize on the strengths of various structures while avoiding the weaknesses or others
What are the 6 types of departments
- functional departmentation
- product departmentation
- matrix departmentation
- geographic departmentation
- customer departmentation
- hybrid departmentation
What are the 8 methods of coordinating divided labour
- Direct supervision/Chain of command
- Standardization of work processes
- Standardization of Outputs
- Standardization of Skills
- Mutual Adjustment
- Liaison Roles
- Task Forces
- Integrators
How does direct supervision/chain of command work?
Most traditional form of coordination
Designated managers are coordinating the work of subordinates
When to use chain of command?
When you walk into loosely structured org with ppl confused on what to do, you hire a supervisor to make sure tasks are done
When overly structured org, reduce supervision
When to use standardization of work processes?
Little direct supervision is necessary for these jobs to be coordinated
Best coordinated by keeping clear routine with lots of rules
How does standardization of outputs work
- Concern is if the work meets physical or economic standards
- Top management puts high budgets to ensure that each division pulls their weight to contributing to overall profit goals
- Often used to coordinate the work of separate product or geographic divisions
What is meant by standardization of skills?
Even when work processes and output cannot be standardized and direct supervision is unfeasible, coordinations can be achieved through technicians and professionals
They’ve got the skills and degrees
What is meant by liaison roles?
Other forms of coordination
A person in 1 department is assigned to achieve coordination with another department
E.g. University and librarian
What is meant by task forces
Other forms of coordination
Temporary groups set up to solve coordination problems across several departments
E.g. to gain more efficient operations-product design to assembly
What is meant by mutual adjustment?
Relies on informal communication to coordinate tasks
It’s a creative way to coordinate
What is meant by integrators
Other forms of coordination
Organizational members permanently assigned to facilitate coordination between departments
Ur pulling all the parts together, ur a linking pin for multiple departments
What are the 5 traditional structural characteristics
- Span of Control
- Flat vs Tall
- Formalization
- Centralization
- Complexity
What is meant by Span of Control?
Traditional Structural Characteristics
- # of subordinates supervised by a manager
The taller the org goes, narrower the span of control
As you go down the hierarchy, span increases
What is meant by Flat vs Tall
Traditional Structural Characteristics
- Flat : few levels
- Tall : many levels in hierarchy
What is meant by Formalization?
Traditional Structural Characteristics
- Extent to which work roles are highly definied by an org
What is meant by Centralization?
- Extent to which decision making power is localized in a particular part of an organization
- Decentralized - decision making power is dispersed down the hierarchy and across departments
What is meant by complexity?
- Extent to which an organization divides labour vertically, horizontally and geographically
What is Mechanistic Structure
Organizational structures characterized by tallness, specialization, centralization, and formalization
On the continuum, where is organic and mechanistic structure?
- Far left; mechanistically
- Far right; organically
What is Organic Structure
Organizational structures characterized by flatness, low specialization,
low formalization, and decentralization
Characteristics of organic structure
Wider spans
Fewer authority levels
Low quantity of formal rules
High knowledge-based authority
Low position-based authority
low centralization
Low formalization
Narrow range of compensation
Characteristics of Mechanistic Structure
Narrow span
Many levels of authority
High quantity of formal rules
High specificity of job goals
Low knowledge-based authority
High position-based authority
Tallness
High centralization
High formalization
Wide range of compensation
When do we use mechanistic structure?
When an org’s environment is more stable and its tech is more routine
When to use organic structure?
When env is uncertain, the tech is less routine & innovation is important
What are the 5 comtemporary structures
- Network organization
- Virtual organization
- Modular organization
- Holacracy
- Ambidextrous Organization
- Liaisons between specialist organizations
- A network of continually evolving independent organizations that share skills, costs and access to one another’s markets
- An organization that performs a few core functions and outsources non-core functions to specialists
- A flat decentralized structure made up of self-managing teams called circles in which employees have multiple roles and responsibilities
- An organization that can simultaneously exploit current competencies and explore emerging opportunities
What is an externel environment?
Events and conditions surrounding an organization that influence its activities
What is a Closed System
External Env
They believe they are self sufficient, they are not influenced by external factors and have an ego
What is an open system?
External Env
Take inputs from the external environment, utilize them and send the outputs back to the environment
What are the 7 components of external environment
- Economy
- Customers
- Suppliers
- Competitors
- Social and Political Factors
- Tech
- Interest Groups
What is Resource Dependency?
It refers to the to the dependency that an organization has on environmental inputs such as capital, raw materials, human resources and customers
What is the Principle of Loose Coupling
The dissonance between the companies objective and the perceived environment
What is environmental uncertainty
A condition that exists when the external environment is vague, difficult to diagnose and unpredictable
What is the Duncan Model?
It assesses the environmental uncertainty
If environmental complexity is simple and env change is stable, what is the uncertainty?
Low Uncertainty
- Small # of external elements, and elements are similar
- Elements remain same or change slowly
If environmental complexity is simple and env change is unstable, what is the uncertainty?
High-Moderate Uncertainty
- Small # of external elements, and elements are similar
- Elements change frequently and unpredictably
If environmental complexity is complex and env change is stable, what is the uncertainty?
Low-Moderate Uncertainty
- Large number of external elements and elements are dissimilar
- Elements remain the same or change slowly
If environmental complexity is complex and env change is unstable, what is the uncertainty?
High Uncertainty
- Large # of external elements and elements are dissimilar
- Elements change frequently and unpredictably
What is strategy?
The process by which top execs seek to ope or reduce dependencies with the constraints and opportunities that an organization’s environment
What are the strategies for Managing Environmental Dependencies
- Anticipation
- Negotiation
- Control
What is meant by Anticipation?
Strategy for Managing Environmental Dependencies
- Staying Ahead
- New competitors
- Scanning : Collecting info
- Forecasting : Using data analytics
What is meant by Negotiation?
Strategy for Managing Environmental Dependencies
- Networking
- Goodwill Building
- Lobbying : Refers to firms representative making a case to cope with government bodies
- Interlocking Directorates : Refers to have a representative serve on different boards to influence policy change
- PR Reputation : Building Reputation and CSR
What is meant by Control?
Strategy for Managing Environmental Dependencies
- Joint Ventures : When 2 or more firms create an alliance
- Strategic Alliance : Creating relation between legally separate bodies
- Mergers : Joining 2 orgs
