The Internal Environment - Structure, Systems and Resources Flashcards
What is the balanced score cards (Kaplan and Norton 1992)?
- managers need to consider the non-financial criteria’s when making decisions. i
- concept of the scorecard aims to provide managers with with clear measures that may track and also drive performance.
- looks at the company from four critical indicators of current and future performances:
1. financial perspective
2. customer perspective
3. internal business perspective
4. innovation and learning perspective
What is organisational structure?
when dealing with the organisational design 6 key elements must be decided upon:
- work specialisation: the degree to which task is divided into separate jobs -critical factor in determining employees productivity
- departmentalisation: creates job activities which must be grouped together so that common tasks can be coordinated. grouped based on: product, geography and processes.
- chain off command: formal lines of authority which span different hierarchical levels from top to bottom, clarifying whom reports to whom. need to maintain hierarchy
- span of control: the number of people reporting directly to a manager. can adopt either a flat (wide span of control)or tall structure (narrow span of control)
- centralisation and decentralisation: centralised refers to the extent to which decisions are made at a single point in the organisation, decentralisation: lower levels are encouraged to provide input.
- formalisation: the degree to which jobs within a firm are standardised through formal job descriptions and degree of discretion available to employees in pursuing activities and tasks.
Why have companies adopted flat structures?
to avoid:
- problems of coordination
- distortion of information
- problems of motivation
What are the factors which managers need to consider in order to select the most appropriate and effective structure for their firms?
- corporate strategy: change in strategy results in change in structure. influences attempt to stay ahead of competition.
- organisational size
- environmental uncertainty: global economy changing and dynamic competitive environments.
What is the entrepreneurial structure?
traditional structures:
- entrepreneurial structure: very simple, built around the founder/manager who acts as authority figure making most of decisions and run day-to-day business. low departmentalisation, low control spans and little formalisation. with growth becomes more bureaucratic: choose to organise between functional or divisional structure.
What are functional structures?
- groups similar or related tasks into functional areas based on domain expertise. efficiency is achieved through specialisation.
(Product, HR, operations, finance)
What are divisional structures?
made up of several units or divisions, that are managed by a divisional manager who has authority over his/her unit.
What should the desired structure aim to do in order to facilitate the generation and implementation of new and useful ideas?
- should aim to unleash employees creativity by creating an internal environment where a large pool of ideas will become the basis for new products and services. = mechanistic and organic structures
What are mechanistic structures?
- evident in stable environments
- formal relationships
- communication channels that operate on a hierarchal basis
- rigid rules and procedures
- decisions made by top management
- employee involvement low
what are organic structures?
- Exist under more turbulent conditions
- Endorse more informal and participative interaction and communication
- Employees are given autonomy and discretion.
What ar organisational systems?
dictate what employees should do.
The use of extrinsic rewards can suppress creativity (Amabile, 1983)
They should avoid using money to ‘bribe’ people (Amabile, 1998)
Infighting, politicking and gossip are particularly damaging to creativity (Amabile, 1998)
Two types of motivation: extrinsic and intrinsic
what is the resource based view? (RBV)
Resource-Based View (RBV) suggests that ‘the firm develops a competitive advantage through its resource base’ (Wernerfelt, 1984)
what are some important characteristics in resources, determining competitive advantages?
Durability
Transparency
Transferability
Replicability
What is sufficient resourcing?
three main categories:
- physical
- intangible
- financial
need
What are systems of communication?
Internal communication within work groups, as well as regular contact with external groups…… all need to be carefully managed when mobilising organisational creativity and innovation (Dougherty and Hardy, 1996).
