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Badm
Badm test 2
121
Management
Undergraduate 2
10/25/2010
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Term
The paradoxical twist:
 Definition
More specialization => more coordination
Term
Formalization:
 Definition
The degree to which jobs are guided by
standardized rules & procedures.
Term
Higher formalization means:
 Definition
More explicit job descriptions
More clearly defined procedures
Less discretion for workers
Lower flexibility
Term
High formalization is appropriate when:
 Definition
Jobs are relatively simple and routine (Charlie Chaplin)
Consistency is important (e.g., safety, legal, equity)

Example: Department of motor vehicles, Red October (next slide)
Term
Low formalization usually coupled with mutual adjustment
 Definition
Mutual adjustment – workers agree between themselves how to
coordinate their work

Example: Jazz band, basketball, product development
Term
Hierarchy
 Definition
An organization s chain of command, that
defines the relative authority each manager has.
Term
Authority:
 Definition
The power to hold people accountable for their actions
and to decide how to use of organizational resources.
Term
Chain of command:
 Definition
The continuous line of authority from top to bottom of an organization
Term
Unity of command
 Definition
a person should report to only one manager
Term
Narrow span of control = taller structures
 Definition
Within department: High control and coordination by manager.
Across the organization: “Silos” to the max
Term
Wide span of control = flatter structures
 Definition
Within department: Less control and coordination by manager
Relies on effective empowerment of workers
Across the organization: Flat organization => quicker
communications, decision-making and implementation
Fewer managers => Lower overhead costs
Term
The trend is strongly to flatter organizations
 Definition
Term
Centralization:
 Definition
The degree to which decisions are made at higher
organizational levels
Term
Decentralization:
 Definition
The degree to which decisions are made at
lower levels
Term
Higher levels centralization:
 Definition
More experience, knowledge of organization and environment as a whole.
Term
Lower levels centralization:
 Definition
Often have more current knowledge of specific features of the environment
Term
Integration:
 Definition
Coordination across departments horizontally
Term
Integrating mechanisms:
 Definition
Structural arrangements to increase
coordination across horizontal boundaries.
Term
Why is integration necessary?
 Definition
Hierarchy = limited capacity to coordinate across departments
Integrating mechanisms augment hierarchy
Term
Direct Contact:
 Definition
Managers meet on an ad hoc basis as necessary to solve
problems that cross departmental lines.
Term
Liaison Roles:
 Definition
Coordinates two departments which have frequent contact, by
having one manager/worker from each department assigned the
responsibility for coordinating with the other. Not full-time.
Term
Task Force:
 Definition
One manager/worker from each relevant department is assigned
to a task force that meets to solve a specific, mutual problem. Members are
responsible for representing their department and reporting back to their
department. Not full-time.
Term
Cross-Functional Teams:
 Definition
One or more managers or workers from each
department are assigned to a specific task requiring intensive, sustained
coordination. The team is an intact unit, with loyalty being to the problem
and the team rather than the department.
Term
Mechanistic
 Definition
• High specialization, rigid departmentalization, clear chain of command, narrow spans of control, centralization, high formalization
• Rigid, controlled—Efficient
Term
Organic
 Definition
• Cross-functional teams, free flow of info, integrating mechanisms, wide spans of control, decentralization, low formalization
• Flexible, changing—Adaptive
Term
Organizational Structure
 Definition
the formal framework by which job tasks are divided, grouped, and coordinated
Term
o Specialization
 Definition
dividing the work up, includes jobs and departmentalization
Term
o Coordination
 Definition
keeping everyone working in sync, includes horizontal and vertical mechanisms
Term
• Job Design
 Definition
how you separate large tasks into smaller components and then organize those tasks into jobs
Term
o Taylorism
 Definition
trend was to simplify jobs to increase mechanical efficiency
Term
 Charlie Chaplin movie
 Definition
shows that initially people said that we need to be really efficient, and everyone has a really simple job
Term
o ENLARGEMENT & ENRICHMENT
 Definition
 Led to comprehensive assessments of job design on employee productivity, motivation, and satisfaction
Term
o Hackman and Oldham’s Job Characteristics Model—key outcomes (productivity, motivation, and satisfaction) depend on a job’s:
 Definition
 Skill variety
 Task identity
 Task significance
 Autonomy
 Feedback
 These make jobs more intrinsically motivating
Term
• Departmentalization
 Definition
basis by which jobs are grouped together
Term
o Functional Departmentalization
 Definition
groups similar JOBS together by functions performed
Term
Pros of functional departmentalization
 Definition
• High specialization
• strong coordination within functions
• high efficiency (low duplication)
Term
Cons of functional departmentalization
 Definition
• Inflexible (“one size fits all”)
• poor coordination across departments
• limited view of organizational goals
Term
o Product Departmentalization
 Definition
group similar PRODUCTS or SERVICES together
Term
Pros of product departmentalization
 Definition
• Specialize in product/service
• More focus, expertise, responsiveness
Term
Cons of product departmentalization
 Definition
• Duplication of functions
• Poor coordination across departments
• Limited view of organizational goals
Term
o Customer Departmentalization
 Definition
group similar CUSTOMERS together
Term
Pros customer departmentalization
 Definition
• Specialize around a customer
• More focus, expertise, responsiveness
Term
Cons customer departmentalization
 Definition
• Duplication of functions
• Poor coordination across departments
• Limited view of organizational goals
Term
o Regional Departmentalization
 Definition
group similar PLACES together
Term
Pros of regional departmentalization
 Definition
• Specialize in region
• More focus, expertise, responsiveness
• Lower travel/transport costs
• Local presence
Term
cons of regional departmentalization
 Definition
• Duplication of functions
• Poor coordination across departments
• Limited view of organizational goals
Term
Pros to Alternatives to functional departmentalization
 Definition
• Focus, expertise, responsiveness—each specializes around a specific source of complexity in the environment (products, customers, places)
Term
Cons to Alternatives to functional departmentalization
 Definition
• Resource duplication
• Lower functional specialization
• People tend to identify with departmental rather than organizational goals
Term
o Functional Structure
 Definition
 Groups similar jobs together into a series of departments, each headed by a manager
 Can be expanded to multiple organizational levels
Term
Advantages of functional structure
 Definition
pecialization, efficiency and size
• High specialization
• Little duplication of resources
• Can achieve huge economies of scale in production
• Huge organizations become possible with multiple levels
Term
 Functional structure Problems in large organizations”Silos”
 Definition
• As functional organizations grow, the # of organizational levels increase
• Silos—closed structure, open on inside
o Each function is a silo, have trouble moving horizontally but not up and down
• Silo effect
o Slow communication and decisions, action is up and down the hierarchy, not across
o Preoccupation with departmental rather than organizational goals
Term
 Hunt For Red October
 Definition
• Sub is the organizational unit
• Captain’s order is implemented quickly—goes down Silo because authority, high responsiveness
• Ryan’s request o the captain travels across the silos—can have influence only, from weakness
• Formalization
• Structure determines organizational responsiveness—problem is not individual competence, structure defines what an organization can and cannot do
Term
When functional structures lose effectiveness
 Definition
• Perform poorly in these situations because such structures tend to be “one-size-fits all”
• Loyalties are ultimately based on function rather than to one specific product, country, or customer…departmentalization all over again
Term
 Organizational structure made up of separate, semiautonomous units called
 Definition
Divisions
Term
Advantages of Divisional Structure
 Definition
• Each division specializes on a specific product, region or customer, and so performs better—more focused, customized strategies, more responsive
Term
 Disadvantages of divisional structure
 Definition
• Resources are duplicated across divisions—separate manufacturing plants instead of large more efficient ones
• Divisions find it tough to cooperate with other divisions—divisions and their leaders often compete with each other, incentives for cooperation are weak, whole idea to focus on your business
Term
 Formalization
 Definition
degree to which jobs are guided by standardized rules and procedures
• Higher means: more explicit job descriptions, more clearly defined procedures, less discretion for workers, lower flexibility
o Appropriate when jobs are relatively simple and routine, consistency is important
• Lower—coupled with mutual adjustment—workers agree between themselves how to coordinate their work
Term
• Red October
 Definition
o Helicopter pilot won’t use reserve fuel
 Pro—enhances safety, consistently return to base
 Con—limits flexibility
 Formalization—rules there for consistency but inflexible
o Lightning during transfer
 Pro—formalization incorporates learning so a complex, dangerous job can be done quickly, consistently and safely
o Can=high expertise, cannont=silos
Term
o Vertically
 Definition
up and down the organization
Term
 Hierarchy
 Definition
an organization’s chain of command, that defines the relative authority each manager has (high expertise)
Term
• Authority
 Definition
power to hold people accountable for their actions and to decide how to use organizational resources
Term
• Chain of Command
 Definition
continuous line of authority from top to bottom of an organization
Term
• Unity of Command
 Definition
a person should report to only one manager
Term
 Span of Control
• Narrow=TALL structures
 Definition
o Within department—high control and coordination by manager
o Across the organization—silos to the max
o More expensive, more managers for less workers
Term
span of control
• Wide=FLAT structures (trend stronger)
 Definition
thin department—less control and coordination by manager; relies on effective empowerment of workers
o Quicker decisions
o Across organization—flat organization=quicker communications, decision-making, implementation
o Fewer managers—lower overhead costs
Term
• Centralization
 Definition
the degree to which decisions are made at higher organizational levels
Term
• Decentralization
 Definition
degree to which decisions are made at lower levels
Term
• Which is best depends on what level is best placed to decide
o Higher levels—more experience, knowledge of organization and environment as a whole
o Lower levels—often have more current knowledge of specific features of environment
 Definition
Term
 Integrating Mechanisms
 Definition
• Structural arrangements to increase coordination across horizontal boundaries
o A task force that coordinates a new product introduction
• Horizontal counterpart to hierarchy
Term
• Integration
 Definition
coordination across departments
o Necessary because hierarchy=limited capacity to coordinate across departments
o Integrating mechanisms augment hierarchy
Term
• Direct Contact
 Definition
managers meet on an ad hoc basis as necessary to solve problems that cross departmental lines
Term
• Liason roles
 Definition
coordinates 2 depts which have frequent contact, by having one manager/worker from each dept assigned the responsibility for coordinating with the other
Term
• Task force
 Definition
one manager/worker from each relevant dept is assigned to a task force that meets to solve a specific, mutual problem. Represent and report back
Term
• Cross-Functional Teams
 Definition
one or more managers or workers from each dept are assigned to a specific task requiring intensive, sustained coordination; loyalty to problem and team rather than dept
Term
o Team-based structures
 Definition
entire organization is made up of work teams that do the organization’s work
Term
o Project structures
 Definition
employees continuously work on projects
• All work is performed by project teams
o Employees work on a series of projects
o Pro—flexible, adaptive to changing needs
o Con—difficult to maintain consistency, gain efficiencies of scale
 Emphasizes mutual adjustment and professional expertise, rather than formalization
 Investments in knowledge management
Term
o Boundaryless organizations
 Definition
an organization whose design is not defined by or limited to the horizontal, vertical, or external boundaries imposed y a predefined structure
• Increase effectiveness (flexibility, efficiency, innovation) by reducing force of structural boundaries in organization
o Remove vertical boundaries—through participative decision-making, wide spans of control, flatter orgs
o Remove horizontal (silo) boundaries—through cross-functional teams, by organizing work around processes instead of functional departments
o Remove external boundaries—form strategic alliances to break down barriers between the company and its customers and suppliers
Term
o Learning organization
 Definition
organization that has developed the capacity to continuously learn, adapt, and change
Term
o Artifacts
 Definition
what you see, hear, feel by hanging around, “I see…”
Term
o Espoused values
 Definition
strategies, goals, philosophies (espoused justifications), to advocate/articulate, “Why do you…”
Term
o Basic assumptions
 Definition
unconscious, taken-for-granted beliefs, perceptions, thoughts and feelings (ultimate sources of values and actions), really have to dig deep to analyze importance, “Why do you really…”
Term
A few good men
 Definition
 Artifacts—uniforms, language
 Espoused values—hierarchy and procedures are obviously central here, “Code Red”, “outside the unit”
 Basic assumptions—why is going outside the unit such a problem? Must stick together
Term
• Culture shapes managerial attitudes and behaviors
o Culture filters perceptions (think selectivity)—
 Definition
what managers consider important, how they interpret it, what actions they take
o Affects planning (degree of risk that plans should contain), structure (degree of autonomy given to employees), and leadership (what leadership style is appropriate
Term
atari example
 Definition
o CEO did not recognize a basic assumption of the culture—only informal interaction could an idea come to fruitation
Term
o Bureaucratic
 Definition
command and control”
 High formalization, dominance of rules and procedure, hierarchical coordination
Term
o Clan
 Definition
in this together attitude
 Tradition, loyalty, personal commitment, extensive socialization, teamwork
Term
o Entrepreneurial
 Definition
 High levels of risk taking, dynamism, and creativity
Term
o Market
 Definition
 Achievement of measurable and demanding goals, especially those that are financial and/or market based, very contractual arrangement
Term
• 7 dimensions of organizational culture
 Definition
o innovation and risk taking—degree to which employees are encouraged to be innovative and to take risks
o attention to detail—degree to which employees are expected to exhibit precision, analysis, and attention to detail
o outcome orientation—degree to which managers focus on results or outcomes rather than on how these outcomes are achieved
o people orientation—degree to which management decisions take into account the effects on people in the organization
o team orientation—degree to which work is organized around teams rather than individuals
o aggressiveness—degree to which employees are aggressive and competitive rather than cooperative
o stability—degree to which organizational decisions and actions emphasize maintaining the status quo
Term
Strong vs. Weak Cultures
 Definition
o Strong cultures—key components of culture are intensely held and widely shared, organizational commitment and higher performance
 Greater influence on employees, more committed employees, higher organizational performance if culture is externally oriented
Term
o Internal orientation
 Definition
focus on issues internal to the firm rather than what is going on outside the firm
 Success can lead managers to act arrogantly, complacently, politically, bureaucratically, to protect what they have
 Strong internally focused cultural drummer prevents managers from mobilizing collective responses to competitive changes
Term
o External orientation
 Definition
focused on several key constituencies and on the external environment
 Stockholders AND employees AND especially customers
 Key managers are willing to initiate change when the environment changes or constituent’s needs change
 A strong externally focused cultural drummer helps those managers mobilize collective, adaptive responses to change
Term
• Drivers of Globalization
 Definition
o Free Trade Doctrine—everyone is better off if each country specializes in what it can produce most efficiently
o Global trend to democracy and free-market policies
o Barriers of distance and culture diminishing—improving transportation and communications technologies
o Tariffs declining—national borders are increasingly irrelevant as barriers to trade
Term
• Regional Trading Alliances
 Definition
agreements among groups of partner countries to facilitate inter-partner trade
o Increase market size and reduce trade barriers
o More beneficial to breaking down barriers than just national ones
Term
• Implications of Globalization and Trade
 Definition
o Firms and managers must be able to compete globally
o Declining trade barriers
 huge opportunities—larger markets and global sourcing
 huge challenges
• intense competition (competing globally)
• managing and operating in foreign countries (different laws and cultures)
• global legal-political environments differ (stability)
• global economic environments differ (inflation)
• employment dislocation
Term
o Ethnocentric Attitude
 Definition
managers believe home country knows best, centralize, hold key decisions/technology close
 Linked to Parocialism—managers view the world solely through its own eyes and perspectives, do not recognize differences
 More naïve manager, just exporting things there and seen as outsiders
Term
o Polycentric Attitude
 Definition
managers believe host-country managers know best, decentralize, let each country manage own unit
 Weaker center perhaps because there are multiple centers, more informed manager
 Try to be citizen in each country you are in
Term
o Geocentric Attitude
 Definition
managers try to transcend barriers and use the best from around the globe, regardless of location
Term
 Multinational
 Definition
any type of international company that maintains operations in multiple countries
Term
 Global company
 Definition
multinational that centralizes its management and other decisions in the home country, consistent with ethnocentric attitude
• Advantages: simple structure, more tightly controlled, economy of scale and efficiency
• Disadvantages: more ineffective management, inflexibility, social and political backlash
Term
 Multidomestic corporation
 Definition
multinational that decentralizes management and other decisions to the local country, consistent with polycentric attitude
• Advantages: extensive knowledge of foreign market and workplace, more support from host gov, committed local managers with high moral
• Disadvantages: duplication of work, reduced efficiency, difficult to maintain global objectives because of intense focus on local traditions
Term
 Borderless organization
 Definition
multinational that attempts to eliminate artificial geographic barriers, consistent with geocentric attitude
• Advantages: forces understand of global issues, balanced local and global objectives, best people and work approaches used regardless of origin
• Disadvantages: difficult to achieve, managers muct have both local and global knowedge
Term
o “Managers Hot Seat” Video
 Definition
 American manager is direct, but befuddled
 Problem—difference in national culture, individualistic vs. collectivistic
• Relationship matters greatly to the Japanese manager
 In a collectivistic society
• Your group is central and distinguished from other groups.
• Others are not initially considered to be part of your group.
• Establishing a relationship is crucial before doing business.
• Roger’s transfer matters.
 Why did the American manager miss it:
• In individualistic societies, the task often prevails over the relationship
• Others are treated in universalistic fashion – no privileged groups
• Roger’s transfer is a footnote
 Cultural Differences
• different perceptions of what is important, appropriate, effectiveperceptions that other is acting inappropriately, ineffectively
• incorrect, serlf-serving attributions regarding other’s motives
Term
o Hofstede’s Model of National Cultural values
 Definition
 Power distance—influence and control unequally distributed
 Uncertainty avoidance – Avoidance of ambiguity and risk, conformity to norms
• High uncertainty=more risky
 Individualism – expectation that people take care of themselves / masters of own destiny.
• Compared to Collectivism, expectation that others in the group will look after them and should be looked after.
 Quantity of Life (or Achievement) – assertiveness, acquisition of money, indifference to others
• Compared with Quality of Life (or nurturing), valuing relationships and showing sensitivity and concern for the welfare of others.
Term
• Innovation
 Definition
change in technology, a departure from previous ways of doing things
Term
• Technology
 Definition
methods, processes, systems and skills used to transform resources into products
Term
• Dominant Design
 Definition
widely accepted standard for a particular product or process
Term
o Technology leadership=first to market strategy
 Definition
 Advantages
• “first-mover”—little competition, high profit margins
• occupy best niches and build entry barriers, can skim buyers who value your product most highly
• learn ahead of the competition
 Disadvantages
• early products often crude and or unreliable
• market often develops slowly
• technology develops quickly and so requires sustained investment
Term
o Technology Followership=late to market
 Definition
 Advantages
• Less rick and uncertainty—about market and technology
• Learn from leaders—imitate strengths, avoid weaknesses
 Disadvantages
• Leaders occupy entrenched positions
• Leaders are a moving target
Term
o Pirates of Silicon Valley
 Definition
 Xerox—leader, had something revolutionary, top management missed it
 Apple got it and Microsoft followed
Term
o Inputs (creative individuals, groups, organizations)transformation (creative process, creative situation)outputs (creative products)
 Definition
Term
o Structural variables
 Definition
 Organic structures positively influence innovation
 Abundant resources
 Frequent communication between organizational units
 Innovative organizations try to minimize extreme time pressures on creative activities
 Employee’s creative performance is enhanced when org’s structure explicitly supports creativity
Term
o Structural variables
 Definition
 Organic structures positively influence innovation
 Abundant resources
 Frequent communication between organizational units
 Innovative organizations try to minimize extreme time pressures on creative activities
 Employee’s creative performance is enhanced when org’s structure explicitly supports creativity
Term
o Cultural Variables
 Definition
 Accept ambiguity
 Tolerate the impractical
 Low external controls
 Tolerate risk
 Tolerate conflict
 Focus on ends rather than means
 Use an open-system focus
 Provide positive feedback
Term
o Human Resources Variables
 Definition
 High commitment to training and development
 High job security
 Creative people
Term
o Principles of New Product development
 Definition
 Use of development funnel
 Establish cross-functional teams
 Use partly parallel development
 Involve customers and suppliers
Term
 Forming Natural Work Units
 Definition
Take sequence of events that makes unit of work and organize around that. What I am doing is feeding into something that will be useful
Term
Parocialism
 Definition
managers view the world solely through its own eyes and perspectives, do not recognize differences
 More naïve manager, just exporting things there and seen as outsiders
Term
 Power distance
 Definition
influence and control unequally distributed
Term
 Quantity of Life
 Definition
assertiveness, acquisition of money, indifference to others
Term
Quality of Life
 Definition
valuing relationships and showing sensitivity and concern for the welfare of others
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