Organizational Development: Answers

Chapter 3
Q1) What is the definition of organization structure? Does the organization structure appear on the organization chart? Explain. Organizational structure is the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals. Typically hierarchical, within an organization arranges its lines of authority and communications and allocates rights and duties. Organizational structure determinates the manner and extent to which roles, power, and responsabilities are delegated, controlled, and coordinated, and how information flows between levels of management. An structure depends entirely on the organizations objectives and the strategy chosen to achieve them. In a centralized structure, the decision making power is in the top management and tight control is exercised over departments and divisions. In a decentralized structure, the decisions making organizational chart illustrates the organizational structure.

Q3) When is functional structure preferable to a divisional structure?

Functional Structure is design that groups people on the basis of their common skills and expertise or because they use the same resources. With a functional structure, all human knowledge and skills with respect to specific activities are consolidated, providing a valuable depth of knowledge for the organization. The structure is effective when in-depth expertise is critical to meeting organizational goals, when the organization needs to be controlled and coordinated through the vertical hierarchy, and when efficiency is important. The functional structure can improve economies of scale by concentrating specialists in groups in a common location and sharing facilities. STRENGHTS WEAKNESSES 1. Allows economies of scale 1. Slow response time to within functional departments environmental changes 2. Enables in-depth knowledge 2. May cause decisions to pile and skill development on top, hierarchy overload 3. Enables organization to 3. Leads to poor horizontal accomplish functional goals coordination among 4. Is best with only one or a few departments products 4. Results in less innovation 5. Involves restricted view of organizational goals

Divisional Structure groups functions according to the specific demands. With this structure, divisions can be organized according to individual products, services, products groups, major projects/programmes, divisions, business or profit centres. The divisional structure promotes flexibility and change because each unit is smaller and can adapt more flexibility to opportunities and threats. Moreover, the divisional structure decentralizes decision making as the lines of authority converge at a lower level in the hierarchy. STRENGHTS WEAKNESSES 1. Suited to fast change in 1. Eliminates economies of scale unstable environment in functional departments 2. Leads to customer satisfaction 2. Leads to poor coordination because product responsibility across product lines and contact points are clear 3. Eliminates in-depth 3. Involves high coordination competence and technical across functions specialization 4. Allows units to adapt to 4. Makes integration and differences in products, standardization across product regions, customers lines difficult 5. Best in large organizations with several products 6. Decentralizes decision making

Functional structure is more preferable because: Its simple and organizations can easily implement different strategies, and they can achieve economies of scale No extra cost is incurred (why most organizations prefer it) The element of training and development is also quite simple Divisional Structure is complex with different dimensions Senior management prefers the functional structure because they believe that principals of change management can easily

Q4) Large corporations tend to use hybrid structures. Why? The Hybrid structure combines characteristics of various approaches tailored to specific strategic needs. Most companies combine characteristics of functional, divisional, geographical, horizontal and/or network structures to take account of the relative strengths and weaknesses of these structures in their own particular business. Large corporations use the Hybrid Structure due to their size, types of products and different markets they operate in. These organizations are typically organized into self-contained divisions of some type. Functions that are important to each product or market are decentralized to the selfcontained units. However, some functions that are relatively stable and require economies of scale and in-depth specialization are also centralized at headquarters. For this reason Hybrid structures are often preferred over

pure functional, divisional, horizontal or virtual network structures, because it can provide some of the advantages of each and overcome some of the disadvantages. Example Sony Europa developed into an unplanned way, with marketing offices and manufacturing plants growing up in different countries. Country managers, by default, became leaders of mini-empires, and there was little cross European coordination. As Sony faced stiffer competition on price and quality from the 1990s, they realized a more strategic and coordinated approach to organizational structure was needed. In 2002, Sony Europas new president Mike Tsurumi established a hybrid structure which retains product divisions, but centralizes the functional areas of HR, Finance, Sales, Marketing and infrastructure.

Q5) What are the primary differences between a task force and a team? Between liaison role and integrating role? Which of these provides the greatest amount of horizontal coordination? Task Force Is a temporary committee composed of representatives from each organizational unit affected by a problem. Each member represents the interest of a department or division and can carry information from the meeting back to that department. Task Forces can be an effective horizontal linkage device for temporary issues. They endeavor to solve problems by direct horizontal coordination and reduce the information load on the vertical hierarchy. Team Teams tend to be the strongest horizontal linkage mechanism. They are permanent task forces and are often used in conjunction with a full-time integrator.

Q7) What conditions usually have to present before an organization should adopt a matrix structure? Matrix Structure is a strong form of horizontal linkages as, in principal, it enables objectives to be pursued simultaneously. The Matrix Structure is an organizational design that groups employees by both function and product. The organizational structure is very flat, and the structure of the matrix is differentiated into whatever functions are needed to accomplish certain goals. It was developed in an effort to give equal emphasis and attention to product and function, or product and geography. Each functional worker usually reports to the functional heads, but do not normally work directly under their supervision. Instead, the worker is controlled by the membership of a certain project, and each functional worker usually works under the supervision of a project manager. This way, each

worker has two superiors, who will jointly ensure the progress of the project. The functional head may be more interested in developing the most exiting products or technologies, whereas the project manager may be more concerned with keeping deadlines and controlling product costs. Conditions for the Matrix The matrix is more likely to be introduced when say; technical expertise and product innovation and change are assessed to be of equal importance

Chapter 4
Q3) Why does environmental complexity lead to organizational complexity? Condition 1 Pressure exists to share scarce resources across product lines. The organization is often medium sized and has moderate number of product lines. Pressures for the shared and flexible use of people and equipment across product lines. Example: the organization is not large enough to assign engineers full-time to each product line, so engineers are assigned part-time to several product/projects Environmental pressures exist for two or more critical outputs, such as for in-depth technical knowledge (functional structure) and frequent new products (divisional structure) Dual pressure requires sharing of power is needed between the functional and product sides of the organization, and a dual-authority structure is needed to maintain that balance Environmental domain of the organization is both complex and uncertain. Frequent external changes and high interdependence between departments require a large amount of coordination and information processing in both vertical and horizontal directions

Condition 2

Condition 3

Q5) Describe differentiation and integration. In what type the environmental uncertainty will differentiation and integration be greatest? Least? Another response to environmental uncertainty is the amount of differentiation and integration among departments. Organizational Differentiation is the differences in cognitive and emotional orientation among managers in different functional departments, and the differences in formal structure among these departments. When the external environment is complex and rapidly changing, organizational departments become highly specialized to handle uncertainty in their external sector. Organizational Integration is the quality of collaboration among departments. Formal integrators are often required to coordinated departments. When the environment is highly uncertain, frequent changes require more information processing to achieve horizontal coordination, so integrators become a necessary addition to the organization structure. According to a research by Lawrence & Lorschs research concluded that organizations perform better when the levels of differentiation and integration match the level of uncertainty in the environment. GREATEST = When organizations performed well in uncertain environments, it meant high levels of differentiation and integration LEAST = Organizations performing well in less uncertain environments had lower levels of differentiation and integration

Q7) What is an organic organization? A mechanistic organization? How

does the environment influence organic and mechanistic organizations? Mechanistic Organization; follows an internal management structure. Its a system marked by rules, procedures, a clear hierarchy of authority and centralized decision making. A mechanistic organization has a formalized structure where communication is mainly vertical and decision-making is centralized at the top. With a mechanistic organization, there is a clearly defined hierarchy of authority. Tasks can be broken down into specialized, separate parts and are rigidly defined Mechanistic is influenced when the external environment is stable. Organic Organization; system marked by free-flowing, adaptive process, an unclear hierarchy of authority and decentralized decision-making. An organic organization is an organization where there is no clear hierarchical structure, decision-making authority is decentralized and rules and regulations are often ignored. Communication is more horizontal than vertical. Knowledge and control of tasks are allocated anywhere within the organization. Organic is influenced in rapidly changing environments.

As environmental uncertainty increases, organizations tend to become more organic which means there is a decentralizing of authority and responsibility is placed on lower levels of the organization. Employees are encouraged to deal with their problems directly. Team-working is also significant and organizations take an informal approach to assigning tasks.

MECHANISTIC ORGANIC 1. Tasks are broken down into 1. Employees contribute to the specialized, separate parts. common tasks of the 2. Tasks are rigidly defined department 3. There is a strict hierarchy of 2. Tasks are adjusted and authority and control, and redefined through employee there are many rules teamwork 4. Knowledge and control of 3. There is less hierarchy of tasks are centralized at the top authority and control, and of the organization there are few rules 5. Communication is vertical 4. Knowledge and control of tasks are located anywhere in the organization 5. Communication is horizontal

Chapter 5 Q6) The population-ecology perspective argues that it is healthy for

society to have new organizations emerging an old organizations dying as the environment changes. Do you agree? Why would European countries pass laws to sustain traditional organizations and inhibit the emergence of new ones? The Population Ecology perspective differs from the other perspectives because it focuses on organizational diversity and adaptation within a population of organizations. This is because the population-ecology states new organizations meet the new needs of society more than established organizations that are slow to change. This theory argues that large organizations often become dinosaurs, in other terms they fail to adapt to the demands of the modern consumers/markets. AGREE - Emerging organizations meet consumers/market demands - They are able to fill a niche market - Small (new) organizations drive the local economy - Initially they focus on satisfying consumer needs (market oriented company) - Large organizations mainly seek high returns, and move jobs to developing nations. - No company is immune to the process of social change

DISAGREE - Existing organizations help markets to be where they are today - Letting existing organization go can leave thousands unemployed - Large organization provide affordable goods and have good supply chains - More stable

Michael Hannan and John Freeman, originators of the Population ecology model of organization, argue that there are many limitations on the ability of organizations to change. There is heavy investment involved; equipment, specialized personnel, limited information and more. STRATEGY FOR SURVIVAL This underlies the Population Ecology model due to the struggle for existence, or competition. Organizations are engaged in a competitive struggle over resources. Some industries have perished in developed nations due to globalization. PROCESS OF ECOLOGICAL CHANGE (page 197)

Q9) How does the desire for legitimacy result in organizations becoming more similar over time? Legitimacy is defined as the general perspectives that an organizations actions are desirable, proper and appropriate within the environments system of norms, values and beliefs. Organizations need legitimacy from their stakeholders. Companies perform well they are perceived by the larger environment to have a legitimate right to exists. Thus the INSTITUTIONAL PERSPECTIVE describes how organizations survive and succeed through congruence between an organization and the expectations from its environment. Institutional Theory is concerned with the set of intangible norms and values that shape behavior, as opposed to tangible elements of technology and structure. Organizations must fit within cognitive and emotional expectations of their audience. Many organizations actively shape and manage their reputations to increase their competitive advantage. The reason why an organization might become more similar over time if their seek legitimate reform its because once an industry becomes established, there is an invisible push towards similarity known as ISOMORPHISM. This means existence organizations will see change as bad, and are very likely to maintain things similar if their legitimacy is high, especially if they try to always satisfy their stakeholders. Q10) How do Mimetic forces differ from Normative forces? Give an example of each. Mimetic Forces are regarded as uncertainty. Most organizations face great uncertainty. Its is not clear for senior managers to know/predict what products, services or technologies will achieve desired goals (sometimes even desired goals are not clear) These forces create pressure to copy or model other organizations. Example: Starbucks was the first coffee chain to offer free WiFi but soon after many branches across the world started to do the same. Also adopting certain Operation Management techniques like JIT who was developed by Toyota. Normative Forces are pressures to change to achieve standards of professionalism, and to adopt techniques that are considered by the professional community to be up-to-date and effective. IMPORTANT: Organization may use any/all of the mechanisms of Mimetic, Coercive and Normative forces to change itself for greater LEGITIMACY.

Chapter 6
Q5) What are some of the primary reasons a company decides to expand internationally? Identify a company in the news that has recently built a new overseas facility. Which of the three motivations for global

expansion described in the chapter do you think best explains the companys decision? Discuss

Q10) Compare the description of the transnational model in this chapter to the elements of the learning organisation described in Chapter 1. Do you think the transnational model seems workable for a huge global firm? Discuss

Chapter 7
Q5) How do flexible manufacturing and lean manufacturing differ from other manufacturing technologies? Why are these new approaches needed in todays environment?

Q6) What is a service technology? Are different types of service technologies likely to be associated with different structures? Explain Service Technology Intangible output Production and consumption take place simultaneously Labor and knowledge intensive Customer interaction generally high Human element very important Quality is perceived and difficult to measure Rapid response time is usually necessary Site of facility is extremely important

Chapter 8
Q3) How might an enterprise resource planning system be used to improve strategic management of a manufacturing organization?

Chapter 9
Q2) Q5) Describe the three bases of authority identified by Weber. It is possible for each of these types of authority co-exist with an organization?

Weber identified three bases of authority that could explain the creation and control of a large organization: Rational-legal authority: This type of authority is based on employees beliefs in the legality of rules and the right of those elevated to positions of authority to issues commands. Traditional authority: This type of authority is based on the belief in traditions and in the legitimacy of the status of people exercising authority through those traditions. Charismatic authority: This is based on devotion to the exemplary character or to the heroism of an individual person and the order defined by the individual.

It is possible for these types of authority to co-exist with one another in an organization. For example the organization could have such a long tradition and have a leader that has a special charisma about them. The leader can assert their authority with their charisma but also the organization may uphold long standing traditions. Q7) Chapter 10 Q1) Describe observable symbols, ceremonies, dress or other aspects of culture and the underlying values they represent for an organization where you have worked. Q4) Q9)

Chapter 11 Q5) Why do organizations experience resistance to change? What steps can managers take to overcome this resistance? It is normal for people within the organization to resist change in situations where they feel vulnerable, and many barriers to change exist at the individual and organizational levels. Organizations experience resistance to change because of four main reasons: - Excessive force on costs: the change could not be cost focused which may have individuals and managers concerned and not happy at changes.

Failure to perceive benefits: If individuals cannot see the benefits of a change then they may be reluctant to accept change. Uncertainty Avoidance: At an individual level many employees may have fears with the uncertainty about change. Fear of loss: Managers and employees may fear the loss of power and status when it comes to change.

Managers can take many important steps to overcome the resistance to change that employees have. For example: - Establish a sense of urgency for change: By creating urgency for change employees will feel more inclined to help out the organization if it is experiencing a crisis. - Find an idea that fits the need: Finding the right idea that fits a need involves collaborating with employees to develop a solution, this will increase employee participation. Employees will feel better about change knowing their own thoughts have been taken into consideration. - Develop plans to overcome resistance to change: Managers may use different plans to overcome resistance to change like forcing and threatening employees to get onboard with the changes or suffer job cuts. Communication is key, in reducing resistance because managers will be given the opportunity to inform employees step-by-step. Training will also help employees understand. - Create change teams: Organizations could deploy change teams that deal with the undertakings of change, such as the communication with other staff, training and other activities to do with implementing change. - Create a vision and strategy for change: Transformational leaders can formulate and articulate a compelling vision for change alongside a strategy that will guide the change process.

Q6) Q11)

Chapter 12 Q3) Q4) The Carnegie model emphasizes the need for a political coalition in the decision-making process. When and why are coalitions necessary? The Carnegie Model was research-based work by members of the CarnegieMellon University in Pittsburgh, USA. Their research indicated that organizational-level decisions involved many managers and that the final choice was based on a coalition among those managers.

A coalition is an alliance among several managers who agree about organizational goals and priorities. When it comes to decision-making coalitions are necessary for two reasons; Organizational goals can often be ambiguous and be inconsistent between different departments. When these goals are ambiguous and inconsistent, managers disagree about problem priorities. It is therefore essential for managers to form a coalition in which they can come together and agree on solutions.

Individual managers may not think completely rationally when making decisions, and suffer with human constraints that dont allow them to identify all the dimensions of a problem. With the help of a coalition managers can exchange different ideas and gain different points of view to reduce ambiguity. Q5) What are the three major phases in Mintzbergs incremental decision process model? Why might an organisation recycle through one or more phases of the model? The Mintzberg incremental decision process model is a series of steps that lead to decisions being made. The model focuses more on the structured sequence of activities taken from the discovery of a problem to the solution. It places less emphasize on the political and social factors known in the Carnegie Model. The three major phases in the incremental decision process model are the; Identification Phase: The identification phase has two processes. It begins with recognition where managers become aware of the problem and realise the need to make a decision. The second part of the identification phase is the diagnosis stage where information is gathered if needed to define the problem situation. Development Phase: In the development phase, a solution is shaped to solve the problem defined in the identification phase. The development of a solution can take two directions; the search direction in which managers may search different alternatives from a selection of solutions. The second direction of the development phase is to design a custom solution. This happens when a problem has no previous experience to help determine a solution. Selection Phase: The selection phase is when a solution is chosen. It may not always be as clear as choosing among alternatives. If the solution is custom-made then an evaluation of the solution may be necessary.

If an organization should find a feasible solution to a problem and for some reason it doesnt seem to work well then the organization will have to go back to the identification phase to gather more information to combat the problem and arrive at a solution. Decisions can take place over an extended period of time and during that time the current circumstances may change.

Use Gillette example of creating a new razor blade. Q8) Q9)Describe the four streams of events in the garbage can model decision making. Do you think those streams are independent of each other? Why? The Garbage Can Model deals with the patterns or flow of multiple decisions within organizations. The model was developed to explain the pattern of decision making in organizations that experience extremely high uncertainty. The unique characteristic of the garbage can model is that the decision making process is not seen as a sequence of steps that begin with a problem and end with the solution. Decisions are the outcome of independent streams of events within the organization. The four streams relevant to organizational decision-making are; Problems: Problems are points of dissatisfaction with current activities and performance. Potential Solutions: These are ideas somebody proposes for adoption to fix a problem. Such ideas form a flow of alternative solutions through the organization. Participants: Participants are the employees within the organization that come and go throughout the organization. Choice Opportunities: Choice opportunities are occasions when an organization usually makes a decision

Chapter 13 Q4) What is the difference between POWER and AUTHORITY? Is it possible for a person to have formal authority but no real power? Discuss Power is the ability of one person or department in an organization to influence other people to bring about desired outcomes. Power exists only in a relationship between two or more people and it can be exercised in either vertical or horizontal directions. Authority is also a force for achieving desired outcomes, but only as prescribed by the formal hierarchy and reporting relationships. Authority is vested in organizational positions, in other words

people have authority because of the positions they hold within the organization. Authority is accepted by subordinates because subordinates believe position holders have a legitimate right to exercise authority. Authority flows down the vertical hierarchy unlike power which can flow upwards, downwards and horizontally. It is not possible for someone to have formal authority but no real power because for them to have formal authority they must have legitimate power, in other words they must hold some higher position within the organization to pass down authority. Q10)