Module 5 Flashcards
What are the 5 organizational Aspets of Business
1- Goals
2- Structure
3- Ownership
4- Size
5- Organizational Culture
Hierarchy of Goals (add definitions)
1- VISION
relates to the future orientation of the organization and describes the kind of organization t ought to be
2-MISSION
statement of key values, define the purpose of the organization and perhaps, its distinctive competitiveness
3- GOALS
more specific but still generalized and broad statements
4- OBJECTIVES
operationalization of the goals
How are goals created according to the Behavioural Theory of the Firm
Goals are developed through negotiation and comprise among different interest groups, reflecting a balance of their competing demands and priorities rather than a unified objective
Define Structure
A grouping of activites and people to achieve goals in an organization
What are the different types of structure?
- Functional Organization
- Divisional Organization
- Project Teams
- Matrix Organization
What are the Advantages and disadvantages of having a “Functional “ structure
ADVANTAGES
-specialization
-logic of custom & practice
-clear chain of command
DISADVANTAGES
-Conflicting departmental objectives
-Conflicting management values
-Lack of coordination
-Lack of consumer orientation
What are the Advantages and disadvantages of having a “Divisional “ structure
ADVANTAGES
-operation of business as profit centers
-encouragement of entrepreneurship
- less upward dependency on top management
-Economies of scale by centralization of common features
DISADVANTAGES
- cooperation and interdependence
- Accounting procedures (more confusing/complex)
-Higher diversity of operations
-Overall management control
What are the Advantages and disadvantages of having a “Project Teams” structure
ADVANTAGES
-ability to cope with unstable environment
-use of individual expertise
-ability to cope with diverse problems
-deal directly with customers
DISADVANTAGES
-costly duplication of services
-scheduling
-participants have no functional “home”
What are the Advantages and disadvantages of having a “Matrix Organization” structure
ADVANTAGES
-emphasizes the strenghts of the functional and project types
-flexibility of labour
-ability to transfer expertise
-dual control via function and project
-closeness to customers
DISADVANTAGES
-coordination and control
-proliferation of commmittes and meetings
-too many bosses
-conflicting loyalties for staff
-can be slow to adapt
What are the different types of flexibility a firm can have?
NUMERICAL FLEXIBILITY
management’s ability to make rapid alterations to the headcount of the firm to meet changes in demand
FUNCTIONAL FLEXIBILITY
employees are able to perform a range of jobs and can move across positions if the need arises
FINANCIAL FLEXIBILITY
required to reflect changes in the supply and demand of labour and to enhance the operation of functional and numerical flexibility
TEMPORAL FLEXIBILITY
concerned with changing the time patterns of work, as with the introduction of shift work
GEOGRAPHICAL FLEXIBILITY
involves the increased mobility of groups of workers as in the introduction of transnational teams
ORGANIZATIONAL FLEXIBILITY
relates to structural and system changes
COGNITIVE FLEXIBILITY
the changing mindset of workers
What are the links between structure and Performance?
-difficult to change structures that have already been set and multiple changes can negatively impact performance due to employees’ need for adaptation
- doubtful whether structure can ALONE lead to improvements in performance
-more successful companies are likely to be less beaurocratic, while less successful firms tend to have more control (particularly cost contro)
State the different types of ownership
- SOLE TRADERS
- PARTNERSHIPS
- LIMITED COMPANIES
-Public limited company (plc) –> stock market
-Private limited company (Ltd) - PUBLIC SECTOR ORGANIZATIONS
(Governmental departments, local governments, universities, schools…)
Describe the Agency Problem
The agents (managers) acting in their own best interest may not be acting in the best interest of the principal
What are the types of public sector institutions?
1- Industries monopolized by government
2- companies with state as majority owner
3- Services to the population (school, health..)
4- Other departments at local or national level
What are the main issues with the Public Sector?
- Public organizations have often ill-defined and conflicting goals
- Serving the public’s interest is hard to achieve since as trying to please everyone conflicts might arise
- Conflicting demands from various stakeholders make management more complicated
- Slow and complex decision-making due to extensive beaurocratic processes
- Management autonomy and motivation are limited
Define Privatization and state its advantages
the process of transfering ownership, control, or management of a business, industry or sector from the public sector to the private sector
Advantages:
- creates competition leading to higher efficiency, productivity, quality and ultimately growth and profit
- shareholders have interest in the effective management of the company
- Customers have a choice —> focus on customer care and improving services
- Reduced costs as a result of competition (especially labour)
- Incentive for innovation
- Reduces public deficit and borrowing requirements
What are the practical consequences of Privatization?
- In NON-TRANSITIONAL economies tthere was little eveidence that privatization had improved the financial or operating performance
Although market decline in unemployment - in TRANSITIONAL economies the results of privatization constantly show imrpovements in performance
What are the types of small firms?
LIFESTYLE FIRM (most small businesses)
- growth is not desired
- produces and adequate level of income for the owner
GROWTH FIRMS
- businesses offering innovative products or rapid growth
What are Harrison’s 4 categories of organization’s ideology or character?
-Power
-Role
-Task
-Person
Define Corporate Culture
culture deliberately created by management to achieve specific goals such as loyalty, higher productivity, innovation…
What are the 8 Attributes of Excellence?
-“Bias for Action”
being typified by clear objectives and a marked absence of committee decisions
-“ Closeness to the customer”
aim at fulfilling customers’ needs
- “Autonomy and Entrepreneurship”
best achieved through small concise teams - “Productivity through people”
- “Hands on: value driven”
top managers seen to be in touch with all employees - “stick to the knitting”
limiting activities to what the firm does best
-“simple form, lean staff”
Avoid complex hierarchies and large administration sections
- “Simultaneous loose-tight properties”
strong central direction with work group autonomy
Describe the usefulness of culture
- Coordination and control via moral involvement
- Claimed to help reduce conflicts and uncertainty
-Reviewed as vital link between rational and subjective aspects of determining strategies
-Fosters sense of belonging and good pay
