Organizational Forms I Flashcards
1
Q
Modularization
A
- reducing the number of elements of a system by grouping
- Main task - differentiation in many smaller tasks - grouping back together into a product
- -> reduction of the number of relationship between modules which leads to more flexibility and adoptability and a reduction of external effects, information overload and internal costs (coordination and communication)
- -> intense interactions within modules facilitate learning opportunities
- -> economies of scale can be exploited if products contain similar modules
- -> the production of modules can be outsourced
2
Q
Modularization on different levels
A
- Macro-level (whole company; segmentation in business units and classification of objects etc.)
- Meso-level (department/process level: manufacturing segments, island concept)
- Micro-level (job design; principle of outcome)
Interfaces are integrating mechanism between modules (define relationships between modules)
3
Q
Interdependencies
A
- the degree to which activity in one organizational unit affects the activities and goals of other units
- -> interfaces are not independent from each other
- -> can be: pooled, sequential or reciprocal
4
Q
Type of interdependencies
A
- Type of interdependencies determine the choice of coordination mechanism
- monolithic organization: with a high level of interdependencies between and within departments, depending on the level of differentiation and integration
- modularized organization: reduces number of interfaces, with a high level of interdependencies within modules but low level between modules, coordination via interfaces
5
Q
Traditional organizational forms
A
- organizations can be formal (defining objects, activities, etc with boundaries) or informal (social system, with relationships between organization members)
- -> focus on formal structure
6
Q
functional organization
A
- integration of similar (several) functions into departments, which are responsible for all of the corresponding function (have own budget, management, objectives, plans etc.)
- the broader the function the longer the way of communication
- each function has its own internal hierarchy
7
Q
functional organization (Vor- und Nachteile)
A
+ high level of interaction within the function - individual knowledge, common functions, specific knowledge –> higher productivity, flexibility of complex tasks, more motivation and performance, peer-support
- suboptimal for big companies: manager highly involved –> coordination procedure between functions; long-term planning may be forgotten; communication and coordination problems between functions
8
Q
Divisional organization
A
- Integration of all functions and tasks to produce one product within the same division
- product management = product specific functions report to the division management
- each division has its own divisional structure; and each can act as profit center or be operated as a separate business
- -> some functions serve multiple divisions; small divisions additionally improve to dynamic market condition
- Divisionalization creates smaller units, simplifying communication within divisions and organizational controlling
9
Q
Types of divisional organization
A
- Product-division structure
- Multidivisional structure
- Product-team structure
10
Q
Product-division structure
A
- combination of centralized functions (serving all product devisions) and decentralized product division (execute all additional tasks concerning the individual product)
- homogenous product portfolio; only if product divisions need the same centralized function
11
Q
Multidivisional structure
A
- product portfolio is heterogenous: each product division needs specific supporting functions
- combines specialization within centralized functions and are supported by decentralized product-specific term
- production is so different
- product division act independently: controlled and coordinated by headquarter managers
12
Q
Product-team structure
A
- combination on elements of product division and multidivisional structure
- focus on new product development (product developing teams –> overlaying; equipped with decisive power)
- enables bottom up influence, smoothly coordination between centralized functions, fast development processes
13
Q
Product-team structure (Vor- und Nachteile)
A
+ single divisions better respond to uncertainty
+ divisions are closer to the market, fast reaction to environmental changes
+ accountability clearly defined
- divisions may compete against each other (may develop similar products/similar types of customer)
- may lead to duplication of internal services
- economies of scale can be lost
14
Q
Regional organizations
A
- Structures are organized according to the needs of different geographical areas; supported by centralized functions
- geographical areas can act as profit center or functional structure
- fits if: transportation is difficult, products are bulky, customer recruit from specific area (e.g. Hospitals)
15
Q
Customer-oriented organization
A
- organizations are structured according to the needs of specific customer groups
- focus on separate specific customer satisfaction
- fits if products comparable markets different and different customer segments
- customer segments have heterogeneous preference and demand
- needs to understand individual needs of customer; knowledge is crucial
16
Q
Divisional vs. customer oriented organization
A
- Goal: best product for customer vs. best solution for customer
- Main offering: new product vs. personalized package
- Most important customer: most advanced customer vs. profitable, loyal customer
- Priority setting basic: Portfolio of products vs. customer
- Org. concept: production profit center, product teams vs. customer segments; individual customer
- Most important processes: Product development vs. CRM
- Measures: market share, new products vs. valuable customer, satisfaction
17
Q
Profit center organization
A
- organizational divisions within the same organization
- management of legally independent subsidiaries
- advantages high level of flexibility; central headquarter can assess the performance of subsidiaries (rewards, budget allocation, etc.)
18
Q
Holding organization
A
- legally independent organizations belonging to the same enterprise
- sustained network of legally independent organization operating under common leadership (companies are part of a common umbrella company, which limits decisive power)
- A parent company has no market access of umbrella company: a holding has one
19
Q
Types of holdings
A
- Share holding: Parent corporation administrates financial shares; subsidiaries act independent, parent do not interfere in strategy
- Financial holding: Parent corporation coordinates funding, accounting and controlling of all subsidiaries
- Strategic holding: Parent corporation execute specific functions for subsidiaries
- Management holding: Parent corporation administrates more (e.g. manage strategic decisions)
20
Q
Umbrella company (Vor- und Nachteile)
A
+ high level of flexibility; restructuring is in comparison simple; ability to influence affiliate subsidiary
- demanding legal requirements (high costs), duplication of decentralized functions
21
Q
Affiliate subsidiaries (Vor- und Nachteile)
A
+ Access to financial resources of umbrella company
+ high level of motivation and flexibility
+ Subsidiaries close to the market
- limited autonomy (depends on type of holding)
- integration by internal prices (hard to determine)
