OTD Chapter 14 Managing Conflict, Power, and Politics

Question 1

Organizational Life Cycle (meaning)

Answer 1

A sequence of growth and development stages through which an organization might pass.

Question 2

Stages of the Organizational Life Cycle

Answer 2

1. Organizational Birth
2. Organizational Growth
3. Organizational Decline
4. Organizational Death

Question 3

Organizational Birth (stage, meaning)

Answer 3

• The founding of an organization (by entrepreneurs).

- The greatest chance of failure, due to liability of newness.

Question 4

Population Ecology Theory

Answer 4

A theory that seeks to explain the factors that affect the rate wat which new organisations are born (and die) in a population of existing organizations.

Question 5

Population of Organizations

Answer 5

The organizations that are competing for the same set of resources in the environment.

Question 6

Population density

Answer 6

The number of organizations that can compete for the same resources in a particular environment.

Question 7

R-Strategy

Answer 7

Entering a new environment early.

Question 8

K-Strategy

Answer 8

Entering a new environment late, after other organizations have already tested the water.

Question 9

Specialist Strategy

Answer 9

Organizations that concentrate their skills to pursue a narrow range of resources in a single niche.

Question 10

Generalist Strategy

Answer 10

Organizations that spread their skills thinly to compete for a brand range of resources in many niches.

Question 11

R-specialist

Answer 11

One niche, early entry.

Question 12

R-generalist

Answer 12

Multiple niches, early entry.

Question 13

K-specialist

Answer 13

Late entry, one niche.

Question 14

K-generalist

Answer 14

Late entry, multiple niches.

Question 15

Natural selection

Answer 15

The process that ensures the survival of the organizations hat have the skills and abilities that best fit with the environment.

Question 16

Organizational Growth (stage 2, meaning)

Answer 16

The life cycle stage in which organizations develop value creation skills and competences that allow them to acquire additional resources.

Question 17

Organizational Isomorphism

Answer 17

The similarity among organizations in a population.

Question 18

Three processes that explain why organizations become more alike

Answer 18

1. Coercive isomorphism
2. Mimetic isomorphism
3. Normative isomorphism

Question 19

Coercive isomorphism

Answer 19

Pressured by other organizations or by society in general.

E.g., Nike, Walmart, and Apple being pressured by the general public to boycot goods made by children in developing countries. The companies responded by creating uniform codes of supplier conduct.

Question 20

Mimetic isomorphism

Answer 20

Organizations intentionally imitate and copy one another to increase their legitimacy.

E.g., Fast-food chains mimicking how McDonalds standardised its global fast food network.

Question 21

Normative isomorphism

Answer 21

Organizations that come to resemble one another over time because they indirectly adopt the norms and values of other organizations in the environment.

Employees and managers frequently move from one organization to another and bring with them the norms and values of their past employer. Most companies in an industry recruit managers from other companies in the same industry. E.g., Dell recruiting managers from PC.

Question 22

Greiner’s Model of Organizational Growth

Answer 22

Phases that organizations go through as they grow. Each growth phase consist of a period of relatively stable growth, followed by a crisis indicating that organizational change is needed for the company to carry on growth.

Question 23

Geiner’s Model of Organizational Growth (stages)

Answer 23

Stage 1: Growth through Creativity
Stage 2: Growth through Direction
Stage 3: Growth through Delegation
Stage 4: Growth through Coordination
Stage 5: Growth through Collaboration

Question 24

Organizational Decline (Stage 3, meaning)

Answer 24

The life cycle stage that an organization enters when it fails to anticipate, recognise, avoid, neutralize, or adapt to external and internal pressures that threaten its long-term survival.

Question 25

Organizational inertia (meaning)

Answer 25

Forces inside the organization that make it resistant to change.

Question 26

Factors that cause (organizational) inertia:

Answer 26

1. Risk aversion.
2. Overly bureacratic culture.
3. Desire to maximize rewards.

Question 27

Risk aversion (meaning)

Answer 27

Managers being unwilling to bear the uncertainty associated with entrepreneurial activities.

Question 28

Desire to maximize rewards (meaning)

Answer 28

Managers’ desire for prestige, job security, power, and strong property rights that bring large rewards often lead them to focus on strategies that increase organizational size, even if it reduces profitability and organizational effectiveness.

Question 29

Overly bureaucratic culture (meaning)

Answer 29

In large organizations, property rights can become so strong that managers spend all their time protecting their specific rights instead of working to advance the organization’s interests.

Question 30

Environmental changes affect an organization’s ability to obtain resources and may lead to organizational decline. What are the major sources?

Answer 30

1. Complexity
2. Dynamism
3. Richness

Question 31

Complexity (meaning)

Answer 31

The number of different forces that an organization has to manage.

Question 32

Dynamism (meaning)

Answer 32

The degree to which the environment is changing.

Question 33

Richness

Answer 33

The number of resources available in the environment.

Question 34

Weitzel and Jonsson’s model of organizational decline (stages)

Answer 34

1. Blinded stage
2. Inaction stage
3. Faulty action stage
4. Crisis stage
5. Dissolution stage

Question 35

Blinded stage (meaning)

Answer 35

Decline begins because key managers fail to recognise the internal or external changes that will harm their organization. This blindness may be due to lack of awareness about changes or an inability to understand their significance.

Question 36

Inaction stage (meaning)

Answer 36

As organizational problems become more visible, managers may recognise the need to change, but still take no action. They may wait for the problem to correct self. They don’t feel as if the situation is urgent.

Question 37

Faulty action stage (meaning)

Answer 37

Faces with rising costs and decreasing profits and market share, management will announce belt-tightening plans designed to cut costs, increase efficiency, and restore profits.

Rather than recognising the need for fundamental changes, managers assume that if they just run the ship tighter, company performance will return to previous levels.

Question 38

Crisis stage (meaning)

Answer 38

Bankruptcy or dissolution are likely to occur unless the company reorganises the way it does business. At this point, companies typically lack the resources to fully change how they run their business.

Cutbacks and layoffs will have reduced the level of talent among employees.

Question 39

Dissolution stage (meaning)

Answer 39

After failing to make the changes needed to sustain the organization, the company is dissolved. A new CEO may be brought in to oversee the closing of stores, offices, and manufacturing facilities.