Lecture 5 Flashcards
Structure
How tasks, roles, and teamwork are organized in a company to ensure everyone knows their job and works efficiently.
The definition of functions, roles, tasks, departments and relationships between those.
Value chain
The value chain describes all the steps and activities required to make and deliver a product or service to customers. It highlights how businesses create value.
Primary Activities:
* Inbound Logistics: Managing the receipt, storage, and distribution of raw materials.
* Operations: Transforming raw materials into finished products or services through manufacturing or processes. Producing products or services.
* Outbound Logistics: Handling storage and delivery of finished products to customers.
* Marketing and Sales: Promoting and selling products or services to attract and retain customers.
* Service: Providing post-sale support, such as maintenance, repairs, or customer service.
Support Activities:
* Infrastructure: Organizational functions like finance, legal, and management that support and integrate all activities.
* Human Resources Management: Recruiting, training, and managing employees to ensure the right talent supports the value chain (people management).
* Technology: The tools, systems and techniques used.
* Procurement: Sourcing and purchasing raw materials, components, or services needed for production and other activities.
Human capital
Things like experience and personal skills, which can not be easily measured.
Departmentalization
How you devide your organization.
Departmentalization describes how an organization organizes its activities and personnel by grouping them into departments
- functional structure
- divisional structure
- matrix structure
- network structure
Functional structure
Groups people by their skills/expertise (e.g., marketing, finance).
Divisional structure
Employees are grouped based on product, market, or geographic region.
Matrix structure
Combines the functional and divisional structure. Employees report to both a functional manager (specialization) and a project manager (product/team).
Network structure
A network structure is a flexible organizational form where employees work together in teams that change per project. There is no clear hierarchy, but a coordinator oversees the collaboration.
This type of structure is often used in startups and smaller companies where collaboration and adaptability are important.
Centralization
- Centralized: Decisions are made by top management.
- Decentralized: Decisions are made at lower levels (more autonomy)
tall vs. flat structure
- Tall Structure: Many management layers with a narrow span of control (few employees per manager). Typically aligns with centralized decision-making, as decisions are concentrated at the top.
- Flat Structure: Few management layers with a wide span of control (many employees per manager). Typically aligns with decentralized decision-making, as decisions are made closer to the work floor.
span of control
Refers to the number of employees a manager directly oversees. Low in tall structures (centralized) and high in flat structures (decentralized).
Formalization and standardization
- Formalization: Documentation of rules and procedures that employees must follow to achieve predictability in behavior.
→ It defines what needs to be done. - Standardization: Focuses on uniformity in work processes to ensure consistent output. The practice of ensuring that everyone performs taksks the same way, creating consistency across the organization.
→ It describes how the work is to be performed.
Two extremes of organization structure
- Machine Bureaucracy (Mechanistic Structure): A highly centralized, formal, and hierarchical organization focused on control. Roles are strictly defined, leaving little room for autonomy or creativity.
- Professionalism (Organic Structure): A decentralized, flat, and informal organization focused on coordination. It is flexible and encourages adaptability and innovation.
Culture
The shared values, beliefs, norms, and behaviors that define how people in an organization work and interact. It’s about “how things are done” and shapes the work environment and employee experience.
Culture dimensions Hofstede
Individualism vs. Collectivism:
* Individualism values personal freedom and independence.
* Collectivism values group loyalty and teamwork.
Power Distance:
* High power distance accepts big differences in power and authority.
* Low power distance prefers equality and fewer levels of authority.
Uncertainty Avoidance:
* High uncertainty avoidance likes rules and stability.
* Low uncertainty avoidance is more comfortable with change and uncertainty.
Masculinity vs. Femininity:
* Masculinity values competition and success.
* Femininity values cooperation and caring for others.
Control strategies
A strategy to make people do their work.
- market-based: make people do their work because you pay them
- bureaucracy: Based on formal structures, rules and procedures. Control is achieved through clear roles and responsibilities.
- clan: Relies on shared values and beliefs to motivate employees (culture).
Employees follow norms because they feel connected to the organization, not because of strict rules or financial incentives.
Competing values framework
A model used to understand and categorize different types of organizational cultures. It identifies two key dimensions that influence how organizations operate:
Flexibility vs. Control:
* Flexibility focuses on adaptability, innovation, and creativity.
* Control focuses on stability, structure, and efficiency through rules and procedures.
Internal vs. External Focus:
* Internal Focus emphasizes optimizing internal processes, employee well-being, and teamwork.
* External Focus focuses on responding to external market demands, customer needs, and competitiveness.
rational goal model
Focuses on productivity and efficiency, emphasizing competition and profit (e.g., Unilever, FMCG companies).
- external + control
- competitive achievement
internal process model
Focuses on stability and control through structured processes and hierarchy (e.g., McDonald’s, manufacturing companies).
- internal + control
- internally focused and ensures the processes and procedures are strictly followed
human relations model
Focuses on employee well-being, teamwork, and engagement (e.g., IKEA, government organizations).
- internal + felxibilty
- loyalty and feeling part of a family
open system model
Focuses on innovation, flexibility, and responsiveness to the external environment (e.g., Google, startups).
- external + flexibility
- innovation, creativity and risk-taking
How to change a culture?
the key to succesful change is understanding that everything in the culture, can be used to affect and change it.
To change culture, both a holistic approach and leadership are needed.
- The holistic approach looks at all aspects of the organization (values, behaviors, systems) to change the culture as a whole.
- Leadership is crucial because leaders must set an example and actively support the change.
Both are necessary for a successful and sustainable cultural change.
