FINAL new content 8-12 Flashcards
porter’s competitive advantage
- something it can do better than competitors
3 forms of competitive strategy:
1. Cost Leadership: org offers a prod at lower price than competitors
2. Differentiation: org offers a dissimilar prod relative to competitor. Unique offerings allow
an org to stand out
3. Focus (aka segmentation strategy): org targets a market niche rather than seeking to engage all possible customers (Exp: demographic, or geographic focus)
**it is difficult to sustain a competitive advantage over time
virtual organizations:
a temporary network of independent
companies, linked to achieve certain goals
Organizational strategies contributing to a rise in virtual organizations (means of externalisation)
- Subcontracting
- Offshoring
- Supply chains
- Platform capitalism
virtual organizations: subcontracting (aka outsourcing)
Hiring other
organizations to complete certain
“non‐essential” business operations
Central to this distinction the delineation of firm boundaries
- See Vertical Disintegration and Horizontal Disintegration
virtual orgs: offshoring
Sending business ops to a diff country. This may be with the same or a different company.
Often done for:
cmtec
Cost‐ arbitrage
Market access
Talent acquisition
Extended work days across multiple time zones
Country offset quotas
virtual organizations:
Supply chains
covers the various steps of the manufact. and delivery of a product/service when those steps span multiple intermediate firms
- exchange relationships are global for major products
- large power imbalances between lead firms and suppliers
Lead firms ( entities that coordinate production and typically control intellectual
property) PROFIT MOST
** lead firm cost‐to‐retail‐price ratios have increased with time
In the last decade, we’ve seen a modest reversal in externalization
trends:
Re‐integration: Moving externalized organizational activities back in house
Reshoring: Moving organizational activities located abroad back in house
virtual organizations:
Platform capitalism
Sharing economy: an econ system where assets/services are exchanged between private indiv through a facilitating platform
E.g. uber and airbnb
Factors reducing organizations’
externalization of activities
- Labor arbitrage declines
- Supply chain disruptions are costly
- Covid‐19 and the rise of nationalism
- New virtual communication tools
- Substantial risks (IP loss, reputational liabilities)
lscns
sharing economy:
What’s new?
What items are in greatest demand on sharing economy platforms?
- Advancements in internet and technologies reduced coordination costs–>Now more complex tasks outside the boundaries of the firm can be achieved
- concept of sharing isn’t new but intro of tech has allowed such systems to achieve large scale
- orgs controlling such platforms generally externalize much of the workforce, risk, task knowledge, and even products/services associated with their industry
________ - Low use, high‐value items typically experience the greatest demand
sources of power
Personal: results from individual
characteristics. These may include individual attributes, human capital, experience, and effort
Positional: Resultant from the formal roles an individual
may hold in an organization or society (exp: those at the top of a hierarchy, or those with decision making authority)
Relational: Derived from the (personal and professional)
relationships an individual has with others
Other network characteristics:
- Network closure
- Network centrality
- Network range
- Frame‐switching
Davis’ alternatives to corporations
- cooperatives and mutuals:
- commons‐based peer production:
- platform capitalism:
formal control
- Hierarchy and reporting
relationships - Explicit instructions for how
to behave in a given
situation - Extrinsic rewards that
encourage desired behavior
social control
Culture is a form of social control: It guides the actions of workers in
conditions of uncertainty
strong vs weak culture
strong: consistently embodied, intensely held and widely shared
ciw
weak: highly variable
culture levels
Macrocultures: Nations, ethnic and religious groups, occupations with
global presence
org. cultures: Present within private, public, nonprofit,
and government organizations
org. subcultures: groups within orgs
microculture: Small collectives that may exist within or outside of orgs
seven primary characteristics of org. culture
IAOPTAS
1) Innovation & risk taking: experiment and embrace uncertainty?
2) attention to detail
3) outcome
orientation: Does leadership focus on results
rather than how results are achieved?
4) people orientation: Does management take into
consideration how decisions impact employees?
5) team orientation: groups vs indiv?
6) aggressiveness : competitive or easygoing?
7) stability: Do organizational activities emphasize continuity
over change?
Process of creating and
sustaining culture (know diagram)
P.S-T.S-O
1) philosophy of org. founders
2) selection criteria (recruitment process, fit to culture)
3) top
management (leadership affects culture)/ socialization
(institutional practices vs individual
practices)
4) org culture (inert, deeply ingrained , powerful form of social control)
Schein’s Model
ARTIFACTS “surface level of culture”:
Easy to observe but difficult to decipher; surface clues may convey
multiple meanings
(what you observe)
ESPOUSED VALUES:
- Ideals, goals, aspirations and rationalizations
- One’s sense of what ought to be, which may be distinct from what is
- Certain org. beliefs and values may become tacit assumptions even if
they are not related to key organizational outcomes
- May not necessarily be
aligned with underlying
behavior or associated artifacts
(what you are told)
BASIC ASSUMPTIONS:
- Unconscious, taken‐for‐granted beliefs and values
- Determine behavior, perception, thoughts and feelings
- Largely consistent adoption among group members: Consensus borne
of repeated success in implementing certain beliefs and values
- Generally nonnegotiable
(what you take for granted)
Culture alignment
affecting culture:
- people, strategy, org tasks, environment
poorly aligned culture–>
- Barrier to Change: Culture is often highly inert (difficulty to alter), even
in highly dynamic business environments - Barrier to Diversity: Cultural reproduction may minimize diversity in
thought, background, and even demographics by selecting new
members based on “cultural fit” - Barrier to Mergers and Acquisitions: Cultural differences can derail
attempts to combine organizations
Competing Values Framework
(CVF)- know how to draw it
- Hierarchy
- Adhocracy
- Market, and
- Clan
seeks to classify firms on two axis:
▪ Horizontal Axis: internal vs external orientation
▪ Vertical Axis: flexible structure vs stable structure
▪clan cultures = correlated more w/
employee satisfaction measures
▪market cultures = more superior operational/ financial
performance
▪strong cultures = positively associated with
outcomes (“ends”) valued by Hierarchy and Adhocracy
cultures
klein
Common lessons across Lincoln
Electric, Southwest and SAS (see
Klein conclusion)
environments
impact organizational success and survival:
Internal environments (Formal/informal structure, culture, employees)
Task environment (Competitors, customers, suppliers, pressure groups)
General environment (Economic, political, legal, social, tech factors)
porters five forces
1) Rivals, 2)
Threat of New Entrants, 3) Buyers, 4)
Threat of Substitutes, 5) Suppliers
Contingency Theory
firm’s have a “technical core” of
essential operations that should be protected/ defended
Resource Dependence Theory
focuses on organizational
relationships that confer relational power and dependence
- Buffering and Bridging strategies seek to address external dependencies
Org. buffering strategies
seek to resist or control changes in the task and
general environment (Meznar and Nigh 1995)
1. Forecasting and Stockpiling: Track necessary inputs and anticipate
resource availability
2. Leveling (also termed Smoothing): Attempt to increase supplier
production or raise demand for the focal firm’s offerings, for
instance, through advertising
3. Adjusting Scale: For instance by downsizing production
Isomorphism
lead orgs to adopt similar forms and practices:
Coercive isomorphism – Pressure from powerful external actors.
Examples: political influence, laws, regulation
Mimetic Isomorphism – Imitation of peers in response to uncertainty
Normative isomorphism – Prevailing rules, beliefs and customs
deemed legitimate. Exp: licensing, or formats (Bluray vs HD DVD)
Institutional theory
Orgs become
infused with value
Neoinstitutionism
LSC
organizations may also
achieve increased legitimacy, survival, and control through
decoupling (the gap between
espoused policies/practices and actual policies/practices e.g 98% of criminal cases are not settled in court,
but through plea agreements)
Porter’s National Competitive
Advantage (i.e., Porter’s Diamond)
1) Factor conditions; 2) Demand conditions; 3) Related and supporting
industries; 4) Firm Strategy
Orgs.’ Strategic Responses to
their Institutional Envis. (Oliver
1991)
Acquiescing: An organization conforms to environmental expectations
(more likely if a consensus exists or if org. focus is narrow)
Compromising: Negotiated solutions; involves nuance and balancing;
More likely in conflicted or unclear environments
Avoiding: Decoupling. Shield the organization from inspection, or assert
adherence with external demands w/o associated change
Defying: Disregard norms/regulations/audience expectations. Rarely
successful
Manipulation: Forge linkages with sources of power; impression
management; obtain endorsements; advertising
vertical disintegration
occurs when business
functions are moved to
an external firm rather
than keeping
production in‐house
horizontal disintegration
BF–>E,rrp
occurs
when business functions are moved
to an external firm, but reporting
relationships are preserved
org culture
system of shared meaning held by members
that details key values, beliefs, and norms that have worked well enough
to be considered valid
org. bridging strategies
shaping the nature of dependencies in the task and
general environment (Meznar and Nigh 1995)
1. Negotiating : The focal firm engages in bargaining efforts with
suppliers or wider‐scale coordination efforts
2. Pooling of resources: Joint ventures, strategic alliances,
associations/cartels
3. Merging: Purchasing the organization(s) that holds key resources,
for instance through vertical integration or horizontal integration.
clan
Aim: Collaborate
Means: Cohesion, participation,
communication, empowerment
Ends: Morale, people
development, commitment
hierarchy
Aim: Control
Means: Consistency, process control, measurement
Ends: Efficiency
Adhocracy
Aim: Create
Means: Adaptability, diversity
of thought, agility
Ends: Innovation and novelty
Market
Aim: Compete
Means: Customer focus
Ends: Market share, profit
