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MGCR 382 > Lecture 7: Organization > Flashcards

Lecture 7: Organization Flashcards

1
Q

What are the four key elements of organizational architecture?

A

• Organizational structure- structure & coordination of roles,
responsibilities & relationships
• Organizational control systems and incentive mechanisms
• Organizational culture
• Processes

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2
Q

def. organizational structure

A

The formal arrangement of roles, responsibilities, and relationships in the firm

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3
Q

describe the relationship between strategy and structure

A

• Strategy and structure have a reciprocal
relationship:
– Structure flows from or follows the selection of
the firm’s strategy – structure aids strategy
implementation

but …
– Once in place, structure can influence current strategic actions as well as choices about future strategies

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4
Q

describe org. structure in int’l business

A

– allows specialization (division of labour)

– requires integration (coordination) across specialized knowledge

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5
Q

what do international business firms seek?

A

– to standardize and integrate activities to maximize global
efficiency, and
– to adapt activities to achieve local effectiveness

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6
Q

to achieve their strategic goals, what must international business firms do and why?

A

the firm must establish the appropriate structure
– organizational structure helps implement strategy by integrating types of knowledge: functional, product, geographical.

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7
Q

What are two categories of organization structures?

A
  • vertical differentiation

- horizontal differentiation (classical org structures)

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8
Q

what are the two vertical differentiation structures?

A

centralization

decentralization

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9
Q

what are the four kinds of horizontal differentiation structures

A 
– Functional
– Divisional
– Global Matrix
– Mixed Structure (structure differs by region
and/or product)
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10
Q

describe centralization

A

• degree to which high-level managers make strategic
decisions and delegate them to lower levels for
implementation
– Gives top-level managers the means to bring about
organizational change
– Seeks to avoid duplication of activities

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11
Q

describe decentralization

A

• degree to which lower-level managers make and
implement strategic decisions
– Motivates mid- and lower- level managers
– Allows greater flexibility & responsiveness
– May be more challenging to coordinate

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12
Q

describe horizontal differentiation

A

– Specifies the set of tasks to accomplish
– Divides the tasks among SBUs, divisions, departments,
committees, teams, jobs, and individuals
– Stipulates superior and subordinate relationships

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13
Q

what are the 3 types of knowledge that org structure helps implement?

A

• Functional knowledge: Access to coworkers with expertise
in basic business functions such as production, marketing,
finance, accounting, HR management, IT
• Product knowledge: Understanding technological trends,
customer needs, competitive forces affecting the goods the
firm produces & sells
• Geographical (area) knowledge: Understanding cultural,
commercial, social, economic conditions in each host
country

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14
Q

what do org structures do with regards to the different kinds of information?

A

• Each form allows firms to integrate one type of knowledge,
• but also makes it difficult to integrate the other types of
knowledge

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15
Q

First choice: function vs. product

describe this

A

If focus on inputs, then structure by function –functional structure

If focus on outputs, then structure by product divisions–divisional structure

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16
Q

What structure has an upstream centre of gravity (raw materials focus/ “core business”)

A

functional structure

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17
Q

what structure has a downstream centre of gravity (retailer focus)

A

divisional structure

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18
Q

describe functional structure

A
  • Structure by inputs
  • Standardized products
  • Operational efficiency
  • Cost leadership
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19
Q

describe divisional structure

A
  • Structure by outputs
  • Different products
  • Flexibility
  • Differentiation strategy
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20
Q

what is divisional structure and what are its subtypes and disadvantage?

A 
• Groups employees based on product, customer
segment, or geographic location
• Subtypes
– International division structure
– World wide geographic (area) structure
– World wide product division structure
• Disadvantage
– Involves duplication of functions and resources across
divisions
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21
Q

describe product division

A 
• Diverse product portfolio
• Differences between
products
• Similarities between
regions
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22
Q

describe geographic division

A

• No dominant product market
• Similarities between
products
• Differences between regions

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23
Q

what structure would the global strategy follow?

A

worldwide product division structure

  • reasonable agree of diversification
  • Facilitates location and experience curve economies, transfer of core competencies
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24
Q

what structure would the transnational strategy follow?

A

global matrix structure or worldwide product divisional structure

Global Matrix:
• Overlays functional and/or divisional forms via dual reporting structure
• Challenge – reporting to two superiors, violates unity of command
principle ‐

25
Q

what structure would the international strategy follow?

A

international division

26
Q

what structure should the localization strategy follow?

A

worldwide geographic (area) structure

because it has a low degree of diversification

-functional structure within each geographic area/division

27
Q

describe global matrix structure

A

• Overlays functional and/or divisional forms via dual reporting
structure
• Challenge – reporting to two superiors, violates unity of command
principle ‐

28
Q

describe neoclassical structures

A

– emphasize coordination and cultivation rather than

command and control

29
Q

describe network structure

A

– arranges differentiated elements in patterned flows of
activity that allocate people and resources to problems
and projects in a decentralized manner

30
Q

describe virtual organization structure

A

– “work across space and time”

– dynamic arrangement among partners that efficiently adapts to market change

31
Q

what is a heterarchy?

A

a structure in which any pair of items is likely to be related in two or more differing ways (generally nonhierarchical)

32
Q

describe Philips in terms of their strategies

A 
• Philips
– IB strategy
• Strategy: Localization since
1930s & WW II
– Goal: transnational
strategy
• Organization structure
– World-wide geographic area
structure (key: National
Organizations:N.O.s)
– New matrix structure but highly
decentralized weak product
dimension & strong geographic
(N.O.) dimension
• Central R&D but weak in bringing
product to market
• Low global integration across
countries. Lower efficiency
33
Q

describe Matsushita and their strategies

A 
– Strategy: Global since 1930s
– Goal: transnational strategy
• Organization structure
– World-wide product division
structure since 1930s
• Highly centralized
– Management, R&D,
manufacturing in Japan
– Japan accounts for 90% of
manufacturing value (1982)
• International subsidiaries only
implement strategy set by HQ
– Weak market
responsiveness
34
Q

what are the key points to consider about organizational architecture?

A

• Architectural elements must be internally
consistent
• Architecture must fit the strategy of the firm
– Strategy is implemented through architecture
• Strategy and architecture must be consistent with
prevailing competitive conditions

35
Q

def. org culture

A

The shared meaning and beliefs that shape how employees interpret information, make decisions and implement actions

36
Q

What are the elements of org culture?

A 
– Leadership style and philosophy
– Values and principles of management
– Work climate and atmosphere
– “How we do things around here”
– Ethical standards
37
Q

can org culture be a source of competitive advantage?

A

yes, it can be a key source of competitive

advantage

38
Q

what is a coordination system?

A

ways of linking people and processes in activities across organization

39
Q

what is coordination by standardization?

A

formal rules and procedures

40
Q

what is coordination by plan?

A

goals, guidelines, sequences, schedules, milestones

41
Q

what is coordination by mutual adjustment

A

social networking, shared understandings,

collaboration

42
Q

what is a control system?

A

ways of guiding,

monitoring, correcting performance

43
Q

what are three different control systems?

A

– Bureaucratic (Administrative) Control
– Market Controls
– Clan Control

44
Q

what are control mechanisms?

A

– formal (plans, diagnostic reports, incentives), informal (beliefs, shared objective, agendas, boundaries, face-to-face)
– Outcome control vs
– Behaviour control

45
Q

What are the main levers of corporate control and coordination (Collis)?

A

-Organization Structure
-Human Resource
Management
-Culture & Style
-Planning & Control

46
Q

describe outcome control

A

 Organization structure: autonomous SBUs or divisions
 Corporate office: tiny, main function to look at financials
 Rewards & incentives: bonus large part of compensation & linked to quantifiable targets
 Personnel: few lateral transfers across divisions, hiring from within each industry
 Resource allocation: tight capital expenditure controls
 Information systems: geared to aggregate financial reporting

47
Q

describe behaviour control

A

 Organization structure: less autonomous business units
 Corporate office: knows the business, acts as coach
 Rewards & incentives: longterm career progression, multiple qualitative measures, operating processes evaluated
 Personnel: internal career paths & lateral transfers
 Culture: common corporate culture to ease cross division transfer
 Information systems: many common systems & prescribed procedures

48
Q

What are Simons’ levers of control?

***MORE IMPORTANT THAN COLLIS

A
  • Belief Systems (org.culture)
  • Interactive Control Systems
  • Boundary Systems
  • Diagnostic Control Systems
49
Q

describe belief systems

A 
– Core values
– Shared beliefs
• Basic values
• Purpose
• Direction
50
Q

describe interactive control systems

A

– Focusing attention on strategic uncertainties
– Modes of managerial involvement in decision activities of subordinates
• Recurring agendas
• Face-to-face meetings
• Debate on data, assumptions & action plans

51
Q

describe boundary systems

A 
– Risks to be avoided
– Allow creativity within defined limits
• Clear rules, limits
• Codes of conduct
• Strategic planning systems
• Capital budgeting systems
52
Q

describe diagnostic control systems

A 
– Critical performance variables
– Provide motivation, resources &
information
• Profit plans & budgets
• Project monitoring systems
• Brand revenue monitoring systems
53
Q

What are the 3 levels of International control and describe them?

A 
-strategic control:
• Foreign market entry
• Business Expansion, JV, Alliances
• Financial Control
• Managing foreign exchange

-organizational control:
• Design of the organization, how the firm
can redesign in response to changes
• Evaluate each product, geographic,
functional SBU – responsibility center
• Use a generic control system for all units
• Evaluate the planning process

-Operations control:
• Evaluates operating processes
• Components of performance that need to
be analyzed daily or hourly
• Daily sales, productivity
54
Q

describe processes

A

• Manner in which decisions are made and work is performed
– Cut across national boundaries as well as
organizational boundaries
– Can be developed anywhere within the firm’s global
operations network

55
Q

In terms of ethnocentric, geocentric, polycentric, what approach does this strategy use: global strategy

A

geocentric

56
Q

In terms of ethnocentric, geocentric, polycentric, what approach does this strategy use: transnational strategy

A

geocentric

57
Q

In terms of ethnocentric, geocentric, polycentric, what approach does this strategy use: international strategy

A

ethnocentric

58
Q

In terms of ethnocentric, geocentric, polycentric, what approach does this strategy use: localization strategy

A

polycentric

MGCR 382 (21 decks)

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