Module 3: Vertical Differentiation (Depth Of Hierarchy) (Means)

Question 1

What is vertical differentiation?

Answer 1

• regarding control within the organisation
• regarding decision-making

Question 2

What are the different vertical differentiation approaches? (Birkinshaw, 2012)

Answer 2

• Communicating with Subordinates
• Gaining input from subordinates on decisions
• Using subordinates to solve problems & innovate
• Making use of external input to improve decision-making

Question 3

What is the traditional model or decision-making?

Answer 3

Hierarchy ( Chain of Command)

Question 4

What is the alternative model for decision-making?

Answer 4

Collective Wisdom ( everyone contributes to the decision-making process).

Question 5

What are the risks of adhering to the collective wisdom principles of decision-making?

Answer 5

Risks of inviting input:
- loss of control
- loss of influence
- Time (needing time)
- Opportunity costs
- Issues around ownership o intellectual property

Question 6

What do managers need to do when they are engaging their employees in decision-making?

Answer 6

• Managers need to recognise the individual’s input, communicate how it has been used, and evaluate the input.
• Managers need to let their subordinates see that their input has been valued. Not doing so would lead to disappointment, resulting in a lack of future collaboration & communication in team meetings and projects).