Lecture 4: External Environment 4.2 Flashcards
4.2 Adapting to Uncertainty in the Environment
1
Q
two dimensions of organization’s environmental change
A
- Simple OR complex
-> Heterogeneity: the dissimilarity of external elements - Stable OR unstable
-> Whether elements in the environment are dynamic
=> The level of uncertainty is driven by the combination of simplicity/complexity and (un)stability
=> Organizations must cope with and manage uncertainty to be effective
2
Q
Two basic organizational design options
A
- Mechanistic Form: Vertical
- Organic Form: Horizontal
3
Q
Mechanistic Form
A
- Tasks are broken down into specialized, separate parts
- Tasks are rigidly defined
- Strict hierarchy of authority and control, many rules
- Knowledge and control of tasks are centralized at the top of the organization
- Communication is vertical
4
Q
Organic Form
A
- Employees contribute to the common task of the department
- Tasks are adjusted and redefined through employee teamwork
- there is less hierarchy of authority and control, few rules only
- Knowledge and control of tasks are located anywhere in the organization
- Communication is horizontal
5
Q
How do companies adapt to a changing environment?
A
= Organizations need the right fit between internal structure and external environment
- Adding Positions and Departments
- Buffering and Building Relationships (Boundary spanning roles)
- Differentiation and Integration
- Organic vs. mechanistic Organizational Design
6
Q
Examples of Organizations that failed to adapt
A
- Kodak
- Blockbuster
- Nokia
- Polaroid
- Blackberry
- Sears
- Toysrus
7
Q
Controlling the environment
A
- Establishing Interorganizational linkages
- Ownership
- Contracts, joint verntures
- Co-option, interlocking directorates
- Executive recruitment
- Advertising, PR - Controlling the Environmental domain
- change of domain
- political activity, regulation
- Trade associations
- Illegitimate activities
