CH.

9 ORGANIZATION SIZE, LIFE CYLCE, & DECLINE

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1. 3 Factors of Org'l Atrophy 7. Charismatic Authority based in the perception of

Org'l Decline Vulnerability Authority remarkable personal qualities in a leader
Environmental decline or competition
ex. Steve Jobs of Apple, Oprah of HARPO
2. Adv To Provides an effective way to bring order to
Bureaucracy large groups of people and prevent abuses 8. Clan Control the use of social characteristics, such as
of power by shared values, commitment, traditions, and
establishing a hierarchy of authority and beliefs to control behavior
specific rules and procedures
Impersonal relationships based on roles works well in ambiguity and uncertainty are
rather than people reduce the favoritism and high
nepotism
9. Collectivity phase in which an organization has strong
characteristic of many preindustrial
Stage leadership and begins to develop clear
organizations
goals and direction.
Provides for systematic and rational ways to
organize and manage tasks too complex to 10. Decline Stages exhibit 9.8 pg. 358
be 11. Decline Stages 1) Blinded stage: internal and external
understood and handled by few individuals, Defined threats
thus greatly improving the efficincy and 2) Inaction: denial occurs despite signs of
effectiveness of deteriorating performance
large organizations 3) Faulty action stage: org faces serious
3. Big Small o The paradox is that the advantages of small problems. failure to adjust can lead to
Hybrid companies sometimes enable them to failure
succeed, 4) Crisis: org can deal with org decline
and hence, grow large which causes chaos. consequences of this
o Most of the 100 firms on Fortune magazine's stage are replacing top management and
list of the fastest-growing companies in have reorganization of the org
America are small firms characterized by an 5) Dissolution: irreversible. have lost
emphasis on being fast and flexible in everything and an org does have any more
responding to the environment choice. too much `
o Small companies can become victims of 12. Disadv To Can hinder attempts to respond to a
their own success as they grow large, shifting Bureaucracy changing environment Can cause
to a inefficiencies having to do with intelligence
mechanistic structure emphasizing vertical and communication
hierarchies Delays movement of info
o Giant companies are "built for optimization, o "Every time you add a layer of
not innovation" bureaucracy, you delay the movement of
o The "big-company/small-company hybrid" info up the chain of
combines a large corporation's resources and command...And you dilute the info because
reach with a small companies simplicity and at each step some details are taken out"
flexibility, for instance, by using a divisional
13. Downsizing intentionally reducing the size of a
structure
company's workforce
4. Bureaucracy a system of managing government through
14. Downsizing 1) Communicate more NOT less
departments run by appointed officials
Implementation 2) Provide assistance to displaced workers
5. Bureaucratic use of rules, policies, hierarchy of authority, 3) Help survivors thrive
Control reward systems, and other formal devices to
15. Elaboration solution to red tape crisis is a new sense of
influence employee behavior and assess
Stage collaboration and teamwork
performance
16. Entrepreneurial the life cycle stage in which an
Stage organization is born and its emphasis is on
GOAL: control employee behavior creating a product and surviving in the
marketplace.
6. Centralization degree to which decision-making authority is
restricted to higher levels of management in
an organization
17. Environmental refers to reduced energy and resources 27. Personnel the proportions of administrative, clerical,
decline or available to support an org Ratios and professional support staff
competition
Ex. admin ratio
18. Formalization refers to rules, procedures and written
documentation such as policy manuals and 28. Professionalism the length of formal training and
job descriptions that prescribe the rights experience of employees
and duties of employees
29. Professionalism o Creating a standard of behaviour can act
19. Formalization stage that involves the installation and use (temp systems, as a substitute for bureaucracy
Stage of rules, procedures, and control systems along with ICS) o It is the length of formal training and
experience of employees
20. Incident Developed to maintain the efficiency and
o A form of organization called
Command control benefits of bureaucracy yet prevent
"professional partnership" has emerged that
System the
is made
problems of slow response to crises
completely of professionals, including
-o Moves from a bureaucratic structure to a
medical practices, law firms, and
flat structure in times of uncertainty
consulting firms
21. Large o Economies of Scale: Huge resources and
30. Rational-legal subordinates comply with a leader
Organization economies are scale are needed, as only
authority because of a set of impersonal rules and
large
regulations that apply to all employees
company could build a massive pipeline in
Alaska, for example
ex. govt orgs
o Global Reach: Have the resources to be a
supportive economic and social force in 31. Self-Control stems from individual value, goals, and
difficult standards
times. Wal-Mart gave employees $1000 for
32. Small o Responsive, Flexible: These are the
emergency assistance when Katrina hit, for
Organizations crucial requirements for success in a
example
global economy
o Vertical Hierarchy, Mechanistic:
o Regional Reach: Quick reaction to
standardized
changing customer needs or shifiting
o Complex: offers hundreds of functional
environmental and
specialties within the organization
market conditions
o Stable Markets: companies can have a
o Flat Structure, Organic: They have a free-
presence that stabilizes a market for years if
flowing management syle that encourages
they're
entrepreneurship and innovation
well established
o Simple: Smaller amount of people, less
o "Organization Men": The organization can
resources, less departments, etc.
provide longevity, raises, and promotions
o Niche Finding: Done through
22. Large vs Small Look at exhibit 9.1 encouraging innovation
o Entrepreneurs: Come up with ideas for
23. Life Cycle a perspective on an org's growth and
new small businesses
change
-an org is: born, grow older and eventually 33. Stages of Life 1) Entrepreneurial
die Cycle 2) Collectivity
Development 3) Formalization
24. Market when price competition is used to evaluate
4) Elaboration
Control the output and productivity of an org or its
major depts and divisions 34. Traditional authority based on a belief in traditions
Authority and in the legitimacy of the status of
25. Organizational when an org grows older and becomes
people exercising authority through those
Atrophy inefficient and overly bureaucratized
traditions
not able to adapt to changes in the
environment
ex. churches, monarchies
26. Organizational a condition in which a substantial, absolute
35. Vulnerability this reflects an org's strategic inability to
Decline decrease in an organization's resource base
prosper in its environment
occurs over a period of time
36. Ways of reducing Bureaucracy -cutting layers of hierarchy
-keeping headquarters staff small
-giving lower workers more freedom to make decisions rather than more regulations and rules
37. Weber's Dimensions of Bureaucracy - written communications and records
- rules and procedures
- specialization and division of labor
- separate position from position holder
- technically qualified personnel
- hierarchy of authority
 Chapter 8: Organizational Culture, Structure, & Design
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1. 1) Common The Means for Unifying Employees or 7. 2nd Type of A Risk-Taking Culture Valuing Flexibility
Purpose Members and gives everyone an Organizational
understanding of the organization's Culture: - External Focus
reason for being 2) Adhocracy - Values Flexibility & Discretion
Culture
2. 1. Formal Formal statements of organizational
Thrust: Create
Statements philosophy, mission, vision, values, as
well as materials used for recruiting,
Means: Adaptability, Creativity, Agility
selecting, and socializing employees
3. (1) Organizational Sometimes called corporate culture - The Ends: Innovation, Growth, Cutting-Edge
CULTURE: The set of shared, taken-for-granted implicit Output
Shared assumptions that a group holds and that
8. (2) A formal system of task and reporting
Assumptions That determines how it perceives, thinks
Organizational relationships that coordinates and motivates
Affect How Work about, and reacts to its various
STRUCTURE: an organization's members so that they can
Gets Done environments
Who Reports work together to achieve the organization's
4. 1st Type of An Employee-Focused Culture Valuing to Whom & goals
Organizational Flexibility, Not Stability Who Does
Culture: What
1) Clan Culture - Internal Focus
9. 2. Slogans & Language, slogans, sayings, and acronyms
- Values Flexibility/Discretion rather than
Sayings
stability and control
10. 2) The i. Differentiation: When Forces Push the
Thrust: Collaborate Environment: Organization Apart
Differentiation -- Differentiation is the tendency of the parts
Means: Cohesion, Participation, versus of an organization to disperse and fragment.
Communication, empowerment Integration— The more subunits into which an
the Lawrence organization breaks down, the more highly
Ends: Morale, People Development, & Lorsch differentiated it is.
Commitment Model -- Arises bc technical specialization and
Division Of Labor
5. 1) The MECHANISTIC ORGANIZATIONS:
Environment: i. Centralized hierarchy of authority
ii. Integration: When Forces Pull the
Mechanistic ii. Many rules and procedures
Organization Together
versus Organic iii. Specialized tasks
-- Integration is the tendency of the parts of
Organizations— iv. Formalized communication
an organization to draw together to achieve
the Burns & v. Few teams or task forces
a common purpose. In a highly integrated
Stalker Model vi. Narrow span of control, taller
organization, the specialists work together
structures
to achieve a common goal. The means for
achieving this are a formal chain of
ORGANIC ORGANIZATIONS:
command, standardization of rules and
i. Decentralized hierarchy of authority
procedures, and use of cross-functional
ii. Few rules and procedures
teams and computer networks
iii. Shared tasks
iv. Informal communication 11. 3) Division of Work Specialization for Greater Efficiency
v. Many teams or task forces Labor
vi. Wider span of control, flatter - (Also known as work specialization) is the
structures arrangement of having discrete parts of a
task done by different people
6. 2) Coordinated Working Together for Common Purpose
Effort
- The coordination of individual efforts
into a group or organization-wide effort
12. 3rd Type of A Competitive Culture Valuing Profits over 18. 5) Span of Control Narrow (or Tall) versus Wide (or Flat)
Organizational Employee Satisfaction - Span-of-Control, or Span-of-
Culture: Management -- refers to the number of
3) Market - Strong External Focus people reporting directly to a given
Culture - Values Stability and Control manager.

Thrust: Compete - Two kinds of spans of control narrow

(or tall) and wide (or flat)
Means: Customer Focus, Productivity,
19. 6) Authority, Authority is related to the management
Enhancing Competitiveness
Responsibility, & authority in the organization; it has
Delegation: Line nothing to do with the manager's
Ends: Market Share, Profitability, Goal
versus Staff fighting ability or personal
Achievement
Positions characteristics
13. 3. Rites & Represent the planned and unplanned
Rituals activities and ceremonies that are used to Authority -- The rights inherent in a
celebrate important events or achievements managerial position to make decisions,
give orders, and utilize resources
14. 4) Hierarchy The Chain of Command - A control
of Authority mechanism for making sure the right people
- Three Types
do the right things at the right time
1) Accountability
2) Responsibility
- Flat Organization - One with an
3) Ability to Delegates One's Authority
organizational structure with few or no
levels of middle management between top 20. 6. Role Modeling, Companies provide structured training
managers and those reporting to them Training, & to provide an in-depth introduction to
Coaching their organizational values
- Unity of Command - An employee should
21. 7) Centralization Centralized Authority -- Important
report to no more than one manager in
versus decisions are made by higher-level
order to avoid conflicting priorities and
Decentralization managers
demands
of Authority
15. 4. Stories, A narrative about an actual event that Decentralized Authority --
Legends, & happened within the organization and that Important decisions are made by
Myths helps to symbolize its vision and values to middle-level and supervisory-level
employees. managers
16. 4th Type of A Structured Culture Valuing Stability & 22. 7. Physical Design Best office layout that will encourage
Organizational Effectiveness employee productivity and send a
Culture: strong message about the culture
4) Hierarchy - Internal Focus
23. 8. Rewards, Titles, Rewards and status symbols are one of
Culture - Values Stability & Control over flexibility
Promotions, & the strongest ways to embed
Bonuses organizational culture
Thrust: Control
24. 9. Organizational Established for recruiting, selecting,
Means: Capable Processes, Consistency, Goals & developing, promoting, dismissing, and
Process Control, Measurement Performance retiring people, all of which reinforce
Criteria the desired organizational culture
Ends: Efficiency, Timeliness, Smooth, 25. 10. Measurable & Pay attention to, measure, and control a
Functioning Controllable number of activities, processes, or
17. 5. Leader How top managers respond to critical Activities outcomes that can foster a certain
Reactions to incidents and organizational crises sends a culture
Crises clear cultural message
26. 11. The hierarchical structure found in most 31. Common 1) Common Purpose - The Means for
Organizational traditional organizations is more likely to Elements of Unifying Employees or Members
Structure reinforce a culture oriented toward control Organizations:
and authority compared with the flatter Four Proposed 2) Coordinated Effort: Working Together for
organization that eliminates management by Edgar Common Purpose
layers in favor of giving employees more Schein & 3
power More Most 3) Division of Labor: Work Specialization
Agree on for Greater Efficiency
27. 12. Companies are increasingly using
Organizational electronic networks to increase
4) Hierarchy of Authority: The Chain of
Systems & collaboration among employees, to
Command
Procedures increase innovation, quality, and efficiency
28. a) The Hollow Hollow structure (the network structure) -- 5) Span of Control: Narrow (or Tall) versus
Structure: The organization has a central core of key Wide (or Flat)
Operating with a functions and outsources other functions
Central Core & to vendors who can do them cheaper or 6) Authority, Responsibility, & Delegation:
Outsourcing faster Line versus Staff Positions
Functions to
Outside 7) Centralization versus Decentralization of
Vendors Authority
29. Boundaryless A fluid, highly adaptive organization 32. Contingency Contingency Approach:
Organization whose members, linked by information (factor) -- Emphasizes that a manager's approach
technology, come together to collaborate Approach & should vary according to—that is, be
on common tasks. The collaborators may Design contingent on—the individual and
include not only coworkers but also environmental situation
suppliers, customers, and even
competitors Contingency Design:
30. b) The Modular A firm assembles product chunks, or -- The process of fitting the organization to
Structure: modules, provided by outside contractors its environment
Outsourcing 33. c) The Virtual Virtual Structure -- A company outside a
Pieces of a The modular structure differs from the Structure: An company that is created "specifically to
Product to hollow structure in that it is oriented Internet- respond to an exceptional market
Outside Firms around outsourcing certain pieces of a Connected opportunity that is often temporary"
product rather than outsourcing certain Partner for a
processes (such as human resources or Temporary Virtual Organization -- An organization
warehousing) of an organization Project whose members are geographically apart,
usually working with e-mail, collaborative
computing, and other computer
connections, while often appearing to
customers and others to be a single, unified
organization with a real physical location
34. A Dozen Ways to 1. Formal statements 40. The 1) An Organization's Culture Matters - The
Change 2. Slogans & sayings Importance of type of organizational culture can be a
Organizational 3. Rites & rituals Culture: 5 source of competitive advantage
Culture 4. Stories, legends, & myths Conclusions
5. Leader reactions to crises 2) Employees are Happier with Clan
6. Role modeling, training, & coaching Cultures
7. Physical design
8. Rewards, titles, promotions, & bonuses 3) Elements of These Cultures--Clan,
9. Organizational goals & performance Adhocracy, Market--can be Used to Boost
criteria Innovation and Quality
10. Measurable & controllable activities
11. Organizational structure 4) Changing the Organizational Culture
12. Organizational systems & procedures Won't Necessarily Boost Financial
Performance (but it might)
35. Drivers and Flow < Drivers of Cultrure -->
of Organizations Organizational Culture -->
5) Market Cultures Tend to Produce Better
Culture Organizational Structure & Internal
Results
Processes -->
Group & Social Processes --> 41. Level 1: Expressed in Observable Artifacts
Work Attitudes & Behaviors --> Observable
Overall Performance > Artifacts— Observable Artifacts—physical
Physical manifestations such as manner of dress,
36. First Category of a) Simple Structure
Manifestations awards, myths and stories about the
Organizational b) Functional Structure
of Culture company, rituals and ceremonies, and
Designs: c) Divisional Structure
decorations, as well as visible behavior
1) Traditional d) Matrix Structures
exhibited by managers and employees
Designs (4 Types)
42. Level 2: Espoused Values - the explicitly stated
37. Four (4) Types of 1) Clan
Espoused values and norms preferred by an
Organizational 2) Adhocracy
Values— organization (Encouraging Trust)
Culture 3) Market
Explicitly
4) Hierarchy
Stated Values Enacted Values - represent the values and
38. Fourth Category a) Hollow & Norms norms actually exhibited in the organization
of Organizational b) Modular (Seizing Visitor's Belongings)
Designs: c) Virtual Structures
43. Level 3: Basic Basic assumptions - which are not
4) Designs that
Assumptions— observable, represent the core values of an
open boundaries
Core Values organization's culture—those that are taken
between
of the for granted and, as a result, are difficult to
organizations (3
Organization change
Types)
44. Line Position Line managers have authority to make
39. How Employees 1) Symbols - an object, act, quality, or
decisions and usually have people reporting
Learn Culture (4) event that conveys meaning to others
to them
2) Stories - a narrative based on true
Examples: the president, the vice presidents,
events, which is repeated—and
the director of personnel, and the head of
sometimes embellished upon—to
accounting
emphasize a particular value
45. Mechanistic In a mechanistic organization, authority is
3) Heroes - a person whose Organizations: centralized, tasks and rules are clearly
accomplishments embody the values of When Rigidity specified, and employees are closely
the organization & Uniformity supervised. Mechanistic organizations, then,
Work Best are bureaucratic, with rigid rules and top-
4) Rites & Rituals - the activities and down communication. This kind of structure
ceremonies, planned and unplanned, that is effective in certain aspects of hotel
celebrate important occasions and (stable env.) work because the market
accomplishments in the organization's demands uniform product quality and
life cleanliness.
46. Organic In an organic (loose) organization, 54. Third Category of ...
Organizations: authority is decentralized, there are fewer Organizational
When rules and procedures, and networks of Designs:
Looseness & employees are encouraged to cooperate 3) Designs that open
Flexibility Work and respond quickly to unexpected tasks boundaries between
Best organizations:
47. Organization A system of consciously coordinated 55. Three (3) Levels of (1) observable artifacts
activities or forces of two or more people Organizational (2) espoused values
Culture (3) basic assumptions
48. Organizational Concerned with designing the optimal
Design structures of accountability and 56. Three Categories of (1) Traditional designs
responsibility that an organization uses to Organizational (2) Horizontal designs
execute its strategies Designs (3) Designs that open boundaries
between organizations
49. The A box-and-lines illustration showing the
Organization formal lines of authority and the 57. Three Factors to Be 1) Environment—mechanistic versus
Chart organization's official positions or work Considered in organic
specializations Designing an
Organization's 2) Environment—differentiation versus
50. The 1) For-profit organizations - These are
Structure integration
Organization: formed to make money, or profits, by
Three Types offering products or services
3) Link between strategy, culture, and
structure
2) Nonprofit organizations -
These are formed to offer services to 58. Three Pairings Of 1) Accountability
some clients, not to make a profit Authority: 2) Responsibility
(examples: hospitals, colleges) 3) Ability to Delegates One's
Authority
3) Mutual-benefit organizations - These are
59. Three Pairings Of Accountability—managers must
voluntary collectives whose purpose is to
Authority: report and justify work results to the
advance members' interests (examples:
1) Accountability managers above them
unions, trade associations)
51. Person- Reflects the extent to which your Authority -- The rights inherent in a
Organization Fit personality and values match the climate managerial position to make
and culture in an organization decisions, give orders, and utilize
resources
52. Second Horizontal design (team-based design) --
Category of teams or work-groups, either temporary or 60. Three Pairings Of Responsibility -- the obligation you
Organizational permanent, are used to improve Authority: have to perform the tasks assigned
Designs: collaboration and work on shared tasks by 2) Responsibility to you
2) The breaking down internal boundaries
Horizontal Authority -- The rights inherent in a
Design: managerial position to make
Eliminating decisions, give orders, and utilize
Functional resources
Barriers to
61. Three Pairings Of Delegation -- the process of
Solve Problems
Authority: assigning managerial authority and
53. Staff Position Staff personnel have authority functions; 3) Ability to responsibility to managers and
they provide advice, recommendations, Delegates One's employees lower in the hierarchy
and research to line managers Authority
Authority -- The rights inherent in a
(examples: specialists such as legal managerial position to make
counsels and special advisers for mergers decisions, give orders, and utilize
and acquisitions or strategic planning) resources
62. To implement a (1) Organizational Culture 68. Two kinds of 1) Narrow (or tall) -- This means a manager
particular strategy, (2) Organizational Structure Spans of has a limited number of people reporting—
managers must Control An organization is said to be tall when there
determine the right 1) Narrow (or are many levels with narrow spans of
kind of 1) _____________ tall) control
& 2) _____________ 2) Wide (or
flat ) 2) Wide (or flat) -- This means a manager
63. Traditional Design (a) a) The Simple Structure: For the
has several people reporting (40+
-- Simple Structures Small Firm
Subordinates, 7-10 is Best)— An organization
-- Has authority centralized in a
is said to be flat when there are only a few
single person, a flat hierarchy, few
levels with wide spans of control
rules, and low work specialization
69. What Drives • Founder's values
64. Traditional Design (b) b) The Functional Structure:
an • Industry & business environment
-- Functional Grouping by Similar Work
Organizational • National culture
Structures Specialties
Culture? • Organization's vision & strategies
-- People with similar occupational
• Behavior of leaders
specialties are put together in
formal groups. This is a quite
commonplace structure, seen in all
kinds of organizations, for-profit and
nonprofit
65. Traditional Design (c) c) The Divisional Structure: Grouping
-- Divisional by Similarity of Purpose
Structures
-- i) Divisional Structure: People with
diverse occupational specialties are
put together in formal groups by
similar products or services,
customers or clients, or geographic
regions

-- ii) Product Divisions: Grouping

Activities Around Similar Products
or Services

-- iii) Customer Divisions: Grouping

Activities Around Common
Customers or Clients

-- iv) Geographic Divisions:

Grouping Activities Around Defined
Regional Locations
66. Traditional Design (d) d) The Matrix Structure: A Grid of
-- Matrix Structures Functional & Divisional for Two
Chains of Command
-- An Organization combines
functional and divisional chains of
command in a grid so that there are
two command structures—vertical
and horizontal
67. Two Kinds of Info 1) The Vertical Hierarchy of
Organization Charts Authority: Who Reports to Whom
2) The Horizontal Specialization:
Who Specializes in What Work
 Chapter 17 Organizational Structure, Design, and Technology
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1. The combination of processes, Operations 15. Structures that combine both functional Matrix
knowledge and techniques that technology and divisional departmentalization structures
creates product or service value for together with dual lines of authority
an organization
16. Structures that group employees Functional
2. The degree to which certain jobs are Division of labor according to the tasks that they perform structures
divided into specific tasks. Often for the organization
associated with specialization.
17. Structures that group employees by Divisional
3. The degree to which rules and Formalization products and services, geographic regions, structures
procedures are standardized in an or customers
organization
18. Structure that is common in small Simple
4. The development of scientific Technology organizations with one central authority structures
knowledge as applied to machinery figure who makes most of the decisions
and devices
19. Understand the business climate -> Set the The
5. The flow of authority and power from Chain of command scene -> Gather data -> Transform the Organizational
the highest to the lowest levels of design -> Implement the design -> Design
the organization Evaluate the design Process
6. A formalized structure based on Mechanistic model
centralization and
departmentalization
7. A framework of work roles that helps Organizational
shape and support employee structure
behavior
8. A less formalized structure based on Organic model
decentralization and cross-functional
teams
9. The number of direct reports to a Span of control
given manager following an
expression
10. An organizational style characterized Bureaucracy
by formalized rules and regulation,
specialized routine tasks, division of
labor, and centralized authority
11. The process of creating or changing a Organizational
structure of an organization to design
integrate people, information, and
technology
12. A process of grouping people with Departmentalization
related job duties, skills, and
experiences into different areas
within the overall organizational
structure
13. A set of tools, processes, systems, Information
and data communications based on technology
microelectronic technology, designed
to disseminate information to provide
support to individuals in an
organization
14. Simple, functional, divisional, and Types of
matrix Organizational
Structures (4 types)
 Strategy Ch. 11 Organizational Design: Structure, Culture, and
Control
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1. Compare and contrast Strategic control-and-reward systems are internal governance mechanisms put in place to align the
different strategic incentives of principals (shareholders) and agents (employees).
control-and-reward Strategic control-and-reward systems allow managers to specify goals, measure progress, and provide
systems. performance feedback.
In addition to the balanced-scorecard framework, managers can use organizational culture, input controls,
and output controls as part of the firm's strategic control-and-reward systems.
Input controls define and direct employee behavior through explicit and codified rules and standard
operating procedures.
Output controls guide employee behavior by defining expected results, but leave the means to those
results open to individual employees, groups, or SBUs.
2. Compare and contrast ...
different strategic
control-and-reward
systems.
3. Compare and contrast Organic organizations are characterized by a low degree of specialization and formalization, a flat
mechanistic versus organizational structure, and decentralized decision making.
organic organizations. Mechanistic organizations are described by a high degree of specialization and formalization, and a tall
hierarchy that relies on centralized decision making.
The comparative effectiveness of mechanistic versus organic organizational forms depends on the context.
4. Compare and contrast ...
mechanistic versus
organic organizations.
5. Define organizational Organizational design is the process of creating, implementing, monitoring, and modifying the structure,
design and list its three processes, and procedures of an organization.
components. The key components of organizational design are structure, culture, and control.
The goal is to design an organization that allows managers to effectively translate their chosen strategy
into a realized one.
6. Define organizational ...
design and list its three
components.
7. Define organizational An organizational structure determines how firms orchestrate employees' work efforts and distribute
structure and describe resources. It defines how firms divide and integrate tasks, delineates the reporting relationships up and
its four elements. down the hierarchy, defines formal communication channels, and prescribes how employees coordinate
work efforts.
The four building blocks of an organizational structure are specialization, formalization, centralization, and
hierarchy (see Exhibit 11.3).
8. Define organizational ...
structure and describe
its four elements.
9. Describe different organizational
structures and match them with
appropriate strategies.
10. Describe different organizational
structures and match them with
appropriate strategies.
11. Describe the elements of organizational
culture, and explain where organizational
cultures can come from and how they
can be changed.
12. Describe the elements of organizational
culture, and explain where organizational
cultures can come from and how they
can be changed.
13. Explain how organizational inertia can
lead established firms to failure.
14. Explain how organizational inertia can
lead established firms to failure.
To gain and sustain competitive advantage, not only must structure follow strategy, but
also the chosen organizational form must match the firm's business strategy.
The strategy--structure relationship is dynamic, changing in a predictable pattern—from
simple to functional structure, then to multidivisional (M-form) and matrix structure—as
firms grow in size and complexity.
In a simple structure, the founder tends to make all the important strategic decisions as
well as run the day-to-day operations.
A functional structure groups employees into distinct functional areas based on domain
expertise. Its different variations are matched with different business strategies: cost
leadership, differentiation, and blue ocean (see Exhibit 11.6).
The multidivisional (M-form) structure consists of several distinct SBUs, each with its
own profit-and-loss responsibility. Each SBU operates more or less independently from
one another, led by a CEO responsible for the business strategy of the unit and its day-
to-day operations (see Exhibit 11.7).
The matrix structure is a mixture of two organizational forms: the M-form and the
functional structure (see Exhibit 11.9).
Exhibits 11.8 and 11.10 show how best to match different corporate and global strategies
with respective organizational structures.
...
Organizational culture describes the collectively shared values and norms of its
members.
Values define what is considered important, and norms define appropriate employee
attitudes and behaviors.
Corporate culture finds its expression in artifacts, which are observable expressions of
an organization's culture.
...
Organizational inertia can lead to the failure of established firms when a tightly coupled
system of strategy and structure experiences internal or external shifts.
Firm failure happens through a dynamic, four-step process (see Exhibit 11.2).
...