Module 3: Horizontal Differentiation (Coordination Of Activities) (Means) Flashcards
What is horizontal differentiation?
The degree of task specialisation across the hierarchy.
What is vertical differentiation?
The depth of hierarchy - top to bottom
What is the irresolvable tension for organisations?
Achieving integration (of a firm’s activities) while attempting to maintain differentiation (horizontal & vertical).
What are the key issues in organisational structure (design)?
- effective information & communication flows
- effective control of decision-making
- effective coordination of subunit activities
The questions raised in choosing an appropriate organisational structure are:
- Who makes what decision based upon what information?
- Who talks with who about what, or what is the structure of communication?
What makes up organisational complexity?
Firms organisational structure really answers the question of:
- the number of departments (refers to functional units).
- the number of vertical levels in the hierarchy (also know as chain of command).
Birkenshaw’s 4 Management Models
- Planning Model (Tight Means & Tight Ends)
- Quest Model (Tight Means & Loose Ends)
- Science Model (Loose Means & Tight Ends)
- Discovery Model (Loose Means & Loose Ends)
What are the two components of an organisational configuration model?
- Functional specialisation (Efficiency)
- Product/Service/Customer Orientation (Effectiveness)
What is functional specialisation?
The primary partitions of the firm’s task into smaller specialised tasks & the efficient completion of each task.
What is product/service/customer orientation?
The primary partitioning of the firm’s task into smaller tasks by the output orientation & their effective completion.
What is efficiency in organisational design?
Consistent quality & reduction of waste
Birkinshaw’s Coordination Spectrum
Managing Across: Coordination: Coordinating activities through Bureaucracy (formal rules) or emergence (autonomy)
How do you define Bureacracy?
“Bureaucracy is a means of coordinating economic activity that relies on formal rules & procedures to ensure conformity of behaviour & to generate consistent outputs.” (Birkinshaw, 2012, p.56)
What are the benefits of adhering more to a bureaucratic model for managing activities?
- provides needed guidance to employees which eases role stress & helps individuals feel more effective.
- clarifies responsibilities since employees & departments are following same rules
- offers consistency & structure to organisations for efficiency work to take place.
What are the challenges of adhering to a highly bureaucratic model for managing activities?
- depersonalised nature of work can lead to weak customer responsiveness, ineffective processes, & disengagement on the part of employees.
- Stifles individual creativity & autonomy, which can foster dissatisfaction and demotivate employees, lowering worker productivity.
Impact of bureaucracy on USYD processes:
Usyd’s formalised rules & strong governance constrains employee autonomy i.e., lecturers have less freedom to add input in course design & teaching).
What are the different types of horizontal differentiation models (different approaches for coordinating activities)?
- Traditional Bureaucracy (Weber’s Model)
- Flexible Bureaucracy
- Internal Market Models
- Network Model
- Pure Market Model
Traditional Bureaucracy
- formalised rules & procedures
- efficiency- oriented
- impersonal
Flexible Bureaucracy
- large structure & scale
- small flexibility & responsiveness
Internal Market Model
- hybrid: transfer prices & service level agreements
Network Model
- network relationships: coordination between independent companies & individuals (freelancers & platforms) to create high levels of collaboration & trust between parties.
Pure Market Model
- work coordinated through purely commercial transactions.
(Autonomy is unreal haha)
Birkinshaw’s Quote on Bureaucracy:
“No large company is immune from Bureaucracy”
What do you need to know about organisational structure & coordinating work?
The larger a company grows (particularly in terms of employee numbers), the more it tends to develop formal processes for structuring work & for maintaining control.
