Organizational design, culture & strategy

Question 1

What is an Organization?

Answer 1

▪ Definition: organizations are (1) social entities that (2) are goal- directed, (3) are designed as deliberately structured and coordinated activity systems, and (4) linked to the external environment.

▪ Types of Organizations
- Large, multinational corporations vs. family-owned businesses
- For-profit business vs. non-profit organizations

Question 2

Organizational Life Cycle

Answer 2

▪ The concept of an organizational life cycle is a useful way to think about organizational growth and change (Greiner, 1972).

▪ A typical four stage model includes:
- Entrepreneurial stage emphasize on creating a product or service and surviving in the marketplace.
- Collectively stage , organizations begin to develop clear goals and direction.
- Formalization stage involves the installation and use of rules, procedures and control systems.
- Elaboration stage focuses upon on collaboration and teamwork

Question 3

Dimensions of Organization Design

Answer 3

➢ Structural Dimensions
▪ Formalization
▪ Specialization
▪ Hierarchy of authority
▪ Centralization

➢ Contextual Dimensions
▪ Size
▪ Organizational technology
▪ Environment
▪ Goals and strategy
▪ Culture

Question 4

Formalization structure

Answer 4

The extent to which explicit and standardized rules, regulations, policies, and procedures govern activities.
* Organization charts
* Policies, handbooks
* Job descriptions
* Operating procedures
* MbO, PERT

High formalization
Low employee discretion, increased managerial control, strict observance of positional authority…

Low formalization
Greater employee discretion, flexibility, spontaneity…

Question 5

Specialization structure

Answer 5

DIFFERENTIATION
The process by which
organizations allocate people and resources to tasks and establish relationships in order to achieve goals.

Vertical
* The number of levels in the hierarchy.
* Reporting relationships.

Horizontal
* Departmentalization, the way tasks are grouped into functions & competencies.
* The span of control: the number of employees reporting to a manager.

Question 6

Hierarchy of authority strucutre

Answer 6

▪ Formal authority is conferred by hierarchy, and this authority is disassociated from the individual in authority

When the person leaves the job, he/she leaves behind the authority

▪ Informal authority, on the other hand, is closely associated to the individual

Question 7

Centralization structure

Answer 7

Where decisions (strategic & work- related) are made, or services located:
– Top (centralization)
– All levels (decentralization)

Question 8

Organizational Culture

Answer 8

▪ Organizational culture is the set of values, norms, guiding beliefs and understandings that is shared by members of an organization and is taught to new members.
- It represents the largely unwritten, feeling part of the organization.
▪ Organizational culture exists at two levels
- Observable symbols, stories, artefacts, behaviors etc. - Underlying values, beliefs, and assumptions

Question 9

Organizational Design and Culture

Answer 9

▪ Adaptability Culture – focus on external environment through flexibility and change to meet customer needs. - Not only react quickly to change, it actively create change.

▪ Mission Culture - it emphasis on a clear vision of the organization’s purpose and on the achievement of goals.

▪ Clan Culture – it focuses on the involvement and participation of the employees and on external expectations.

▪ Bureaucratic Culture – it has an internal focus and a consistency orientation for a stable environment.

Question 10

Can you manage culture?

Answer 10

• Culture drives strategy
  – Culture can strengthen the implementation of strategy
  – Culture can impose boundaries on strategy
  – Culture can lead to strategic drift
• Strategy can include changing culture
  – Culture is difficult to manage but can be changed over time
  – Culture can be adapted so as to better deliver strategy