Organizational Forms II

Question 1

Process organization

Answer 1

- Process = sequences of activities
Characteristics: 
- Market (aim at business-partner) 
- output (clearly defined output)
- business objective organization (Processes to achieve organizational goal)

–> differentiation and integration within functional structure leads to several challenges (e.g. communications between functions) –> hierarchy based on process

Question 2

Objective of process organizations

Answer 2

• Reduction of process costs
• Reduction of lead times
• Increased flexibility
• Improved delivery time
• Reduction of costs associated with defects
• Increasing customer satisfaction

–> Process organizations are based on the assumption that organizations can only persist if they can provide their customers with additional benefits.

Question 3

Principles of Process Organizations

Answer 3

• Avoid unnecessary task differentiation: Low levels of integration efforts
• Work is simplified and hierarchy is flattened by combining related tasks
• Decentralization
• Integrate all activities into process-teams

Question 4

Hierarchy of Processes

Answer 4

1. Core processes (strategically important, focused on satisfaction of customer needs; differentiate organization from competition)
2. Supporting processes (provide necessary resources for smoothly execution of core functions)
3. Managing processes (efficient coordination for achievement of organizational objectives –> process interdependencies)
4. Sub-processes (structuring processes of core, managing and supporting processes)
5. Activities (individual tasks –> depending on importance of process organization may develop them within their boundaries or acquire them on external markets)

–> not all processes are equally important

Question 5

Business Process Management (BMP)

Answer 5

• creation and reformation of processes within established organizations
• reduction of interfaces
• re-design of organizational structure based on processes
• top-down approach

Question 6

Evaluating Process Organizations: Advantages

Answer 6

+ Process teams operate autonomously, reducing managerial duties
+ High levels of flexibility
+ Cost savings due to flat hierarchies
+ High levels of customer orientation, shorter “time to customers
+ Within process teams, higher levels of: Task identity, Task variability, Social interactions, Autonomy, Learning possibilities, Feedback (increase motivation)

Question 7

Evaluating Process Organizations: Disadvantages

Answer 7

• different technical specialities work side by side due to flat hierarchy lateral transfer are more common that vertical promotions
• break traditional unity of command principle

Question 8

Matrix organizations

Answer 8

• Organizational design is simultaneously based on two criteria (e.g., functions and products, or functions and processes)
• Structure can benefit from functional structures (specialization) and benefits from process orientation (strong coordination)
• Employees are working in cross-functional and product-specific teams
• High level of decentralization

Question 9

Teams as Basic Mechanisms for Differentiation & Integration

Answer 9

• Flat hierarchy within teams
• Team membership is not fixed (change teams)
• structures are highly flexible

Question 10

Management of Matrix Org.: Functional vs. Product Team Management

Answer 10

• conflicts are solved by mutual adjustments
• Functional team management (managers are responsible for efficient tasks execution)
• vs. product team management (horizontal integration of all functional tasks)
• -> Both managers have equal rights The main task of matrix managers is to discuss and solve coordination problems

Question 11

The Role of Top Managers

Answer 11

• institutionalize conflicts
• conflicts are regarded as a prosperous source of productive solutions (not a disturbance)
• balance the power distribution between both parties promoted by truthful/respectful climate

Question 12

Evaluating Matrix Organizations

Answer 12

+ highly flexible
+ balance between quality and costs
+ communication

• responsibility/authority between functional and product manager
• dual attention for functional/product goals
• imbalance between interests

Question 13

Network organizations

Answer 13

• focus on core functions but cannot react to fast changes
• outsource functions which are still interdependent with functions that the organization owns and operates
• Intellectual property can leak from one company to another

Question 14

Fundamental Decisions in Networking Organizations

Answer 14

• What role in network should organization play?
• specialist in few capabilities vs. player in all networks that need specific capabilities
• which capabilities should organization own/control and which should be outsourced?
• own activities important to customer/influence the brand

Question 15

Challenges

Answer 15

1. Partner (selection)
2. Define relationships
3. Managing

Question 16

Partner (selection)

Answer 16

• understanding of potential partners strategic intention (goals, time horizon, values, norms, etc)
• types of partnership: operator model (one partner), shared model (together), joint venture (decision made by venture)
• -> can be managed as dynamic process (from small joint venture project to all joint venture)

Question 17

Define relationships

Answer 17

• design processes to coordinate the activities performed by strategic partner
• interdependencies with network, market, contract, alliance, equity, ownership –> drives organization to complex form of relationship

Question 18

Managing

Answer 18

• dilemma of partnering due to interaction between people with different organizational culture; reward system must encourage employees to look for win-win outcome between involved parties
• -> people + reward system influence actions, norms and values

Question 19

Network organizations (Vor- und Nachteile)

Answer 19

+ low production costs; flexibility; easier to manage (compared to process org.)
+ simple to terminate contracts
+ dynamic environments (organic structure)

• low level of organizational learning and resource efficacy
• the more complex value creation the more problems cause on implementation

Question 20

Borderless organization

Answer 20

• individual functional experts connected via IT

- project specific activities

Question 21

E-Commerce

Answer 21

• between organization (B2B) or to customer (B2C)