Chapter 8 Notes PDF

Preview

Summary

Thompson Lecture notes + text book notes for chapter 8...

Description

8.1: Aligning Strategy, Culture, and Structure How an Organization’s Culture and Structure Are Used to Implement Strategy Organizational Culture: The Shared Assumption That Affect How Work Gets Done According to Edgar Schein Organizational Culture (aka Corporate Culture): Is defined as the set of shared, taken-forgranted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments - Culture is the social glue that binds members of the organization together Organizational Structure: Who Reports to Whom and Who Does What Organizational Structure: A formal system of task and reporting relationships that coordinates and motivates an organization’s members so that they can work together to achieve the organization’s goals 8.2: What Kind of Organizational Culture Will You Be Operating In? The Three Levels of Organizational Culture: Level 1: Observable Artifacts - Physical Manifestations of Culture - Physical manifestations such as manner of dress, awards, myth and stories about the company, rituals and ceremonies, and decorations, as well as visible behavior exhibited by managers and employees Level 2: Espoused Values - Explicitly Stated Values and Norms - Espoused values are the explicitly stated values and norms preferred by an organization - Enacted Values: Values and norms actually exhibited in the organization Level 3: Basic Assumptions - Core Values of the Organization - Basic assumptions, which are not observable, represent the core values of an organization’s culture - those that are taken for granted and, as a result, are difficult to change Four Types of Organizational Culture: Clan, Adhocracy, Market, and Hierarchy Two dimensions The horizontal dimension - inward or outward focus? - Expresses the extent to which an organization focuses its attention and efforts inward on internal dynamics and employees versus outward toward its external environment and its customers and shareholders The vertical dimension - flexibility or stability? - Expresses the extent to which an organization prefers flexibility and discretion versus stability and control Combining these two dimensions creates the four types of organizational culture based on different core values 1. Clan Culture: An Employee-Focused Culture Valuing Flexibility, Not Stability a. Has an internal focus and values flexibility rather than stability and control. b. Really focused on developing their employees and view them as partners

2. Adhocracy Culture: A Risk-Taking Culture Valuing Flexibility a. Attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace 3. Market Culture: A Competitive Culture Valuing Profits over Employee Satisfaction a. A market culture has a strong external focus and values stability and control b. Profits take precedence over employee development and satisfaction 4. Hierarchy Culture: A Structured Culture Valuing Stability and Effectiveness a. Has an internal focus and values stability and control over flexibility b. Apt to have a formalized, structured work environment aimed at achieving effectiveness through a variety of control mechanisms that measure efficiency, timeliness, and reliability in the creation and delivery of products How Employees Learn Culture: Symbols, Stories, Heroes, Rites and Rituals, and Organizational Socialization 1. Symbols a. An object, an act, a quality, or an event that conveys meaning to others 2. Stories a. A narrative based on true events, which is repeated - and sometimes embellished upon - to emphasize a particular value 3. Heroes a. A person whose accomplishments embody the values of the organization 4. Rites and Rituals a. Activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization’s life 5. Organizational Socialization a. Defined as the process by which people learn the values, norms, and required behaviors that permit them to participate as members of an organization b. Three phases i. Anticipatory Socialization Phase ii. Encounter Phase iii. Change and Acquisition Phase The Importance of Culture Six conclusions 1. An organization’s culture matters 2. Employees have more positive work attitudes when working in organizations with clan cultures 3. Clan and market cultures are more likely to deliver higher customer satisfaction and market share 4. Operational outcomes, quality, and innovation are more strongly related to clan, adhocracy, and market cultures than to hierarchical ones 5. An organization’s financial performance (profit and revenue growth) is not strongly related to organizational culture 6. Companies with market cultures tend to have more positive organizational outcomes

What Does It Mean to “Fit”? Anticipating a Job Interview Person-organization (PO) fit, which reflects the extent to which your personality and values match the climate and culture in an organization 8.3: The Process of Culture Change Changing organizational culture is essentially a teaching process- that is, a process in which members instruct each other about the organization’s preferred values, beliefs, expectations, and behaviors. The process is accomplished by using one or more of the following 12 mechanisms 1. Formal Statements 2. Slogans and Sayings 3. Rites and Rituals 4. Stories, Legends, and Myths 5. Leader Reactions to Crises 6. Role Modeling, Training, and Coaching 7. Physical Design 8. Rewards, Titles, Promotions, and Bonuses 9. Organizational Goals and Performance Criteria 10. Measurable and Controllable Activities 11. Organizational Structure 12. Organizational Systems and Procedures 8.4: Organizational Structure The Organization: Three Types For-profit organizations Nonprofit organizations Mutual-benefit organizations The Organization Chart A box-and-lines illustration showing the formal lines of authority and the organization’s official positions or work specializations The Vertical Hierarchy of Authority: Who Reports to Whom The Horizontal Specialization: Who Specializes in What Work 8.5: Not on test will try to skim over later 8.6: Basic Types of Organizational Structures Organizational design is concerned with designing the optimal structures of accountability and responsibility that an organization uses to execute its strategies. Three Types! 1. Traditional Designs: Simple, Functional, Divisional, and Matrix Structures a. The Simple Structure: For the Small Firm

i. ii.

Often found in a firm’s very early, entrepreneurial stages An organization with a simple structure centralized in a single person, a flat hierarchy, few rules, and low work specialization b. The Functional Structure: Grouping by Similar Work Specialties i. People with similar occupational specialities are put together in formal groups c. The Divisional Structure: Grouping by Similarity of Purpose i. People with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients, or geographic regions 1. Product Divisions: Grouping by Similar Products or Services 2. Customer Divisions: Grouping by Common Customers or Clients 3. Geographic Divisions: Grouping by Regional Location d. The Matrix Structure: A Grid of Functional and Divisional for Two Chains of Command i. An organization combines functional and divisional chains of command in a grid so that there are two command structures - vertical and horizontal 2. The Horizontal Design: Eliminating Functional Barriers to Solve Problems a. Aka team-based design: Teams or workgroups, either temporary or permanent are used to improve collaboration and work on shared tasks by breaking down internal boundaries 3. Designs That Open Boundaries between Organizations: Hollow, Modular, and Virtual Structures A boundaryless organization is a fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks. The collaborators may include not only co-works but als suppliers, customers, and even competitors. Has three types of structures. a. The Hollow Structure: Operating with a Central Core and Outsourcing Functions to Outside Vendors i. Aka the network structure: The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster ii. May operate with extensive, even worldwide operations, yet its basic core could remain small, thus keeping payrolls and overhead down. b. The Modular Structure: Outsourcing Pieces of a Product to Outside Firms i. Oriented around outsourcing certain pieces of a product rather than outsourcing certain processes of an organization. ii. In a modular structure, a firm assembles product chunks, or modules, provided by outside contractors c. The Virtual Structure: An Internet-Connected Partner for a Temporary Projects i. An organization whose members are geographically apart, usually working with e-mail, and other forms of information technology yet which generally appears to customers as a single, unified organization with a physical location

8.7: Contingency Design: Factors in Creating the Best Structure Three Factors to Be Considered In Designing an Organization’s Structure The process of fitting the organization to its environment is called contingency design 1. Environment - mechanistic versus organic - the Burns and Stalker Model a. Mechanist Organizations: When Rigidity and Uniformity Work Best i. In a mechanistic organization, authority is centralized, tasks and rules are clearly specified, and employees are closely supervised 1. They are bureaucratic with rigid rules and top-down communication ii. Organic Organizations: When Looseness and Flexibility Work Best 1. In an organic organization, authority is decentralized, there are fewer rules and procedures, and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks 2. Sometime termed “Adhocracies” 2. Environment - differentiation versus integration a. Paul R. Lawrence and Jay W. Lorsh proposed a differentiation-integration dimension i. Differentiation: When Forces Push the Organization Apart 1. Differentiation is the tendency of the parts of an organization to disperse and fragment 2. The more subunits into which an organization breaks down, the more highly differentiated it is 3. Arises because of technical specialization and division of labor ii. Integration: When Forces Pull the Organization Together 1. Integration is the tendency of the parts of an organization to draw together to achieve a common purpose 3. Link between strategy, culture, and structure...