Adapting Organizational Design to Globalization, Innovation, and Ethics, Apuntes de Organización Empresarial

¡Descarga Adapting Organizational Design to Globalization, Innovation, and Ethics y más Apuntes en PDF de Organización Empresarial solo en Docsity!

Prof. Dr. Anja Tuschke

Organisationstheorie

Prof. Dr. Anja Tuschke

Institute of Strategic Management

Prof. Dr. Anja Tuschke

Diese Slides ersetzen nicht den Besuch der Vorlesung. Ich erhebe keinerlei Anspruch auf Vollständigkeit.

Als Quellen habe ich benutzt:

• Vorlesungsslides des Moduls “Organisationstheorie”
• “Understanding the Theory and Design of Organizations”, 11th^ Edition, Daft

Prof. Dr. Anja Tuschke

Organization Theory vs. Organizational Behavior – The micro-macro distinction

Organization Theory

• Organization Theory takes a macro perspective (based on scientific studies)
• Analyzes the organization itself, or ist primary subunits (departments and divisions)
• Is mainly concerned with the overall organization‘s ability to achieve ist goals and adapt ist environment (organizational effectiveness

Organizational Behavior

• Studies the behavior of individuals and teams in the workplace
• Focuses on employee performance and attitude variables (e.g. employee productivity)
• Emphazises perception, values, learning, motivation, and the personality-task interface and role, status, leadership, power, communication, and conflict
• An organization is a consciously managed and coordinated social entity, with an identifyable boundary, which functions on a relatively continous basis to achieve a common goal or a set of goals
• Social entity
• Goal oriented
• Deliberately structured and coordinates
• Linked to external environment
• Organizations exist to…
• Create Value for owners, customers, employees
• Accomodate challanges of diversity, ethics and coordination
• Bring together resources to achieve desired goals
• Produce goods and services efficiently
• Facilitate innovation
• Adapt to and influence a rapidly changing environment à 3 steps of choosing the optimal Organization Design: à Analyzing Contingency Factors à Analyzing Structural Factors à Drawing organizational chart Back…

Prof. Dr. Anja Tuschke

Challenges for Organizations

Globalization

• Rapid advances in technology and communication
• Increasing interconnectedness of markets, technologies and organizations
  • Outsourcing; Strategic Partnering Intense Competition
• Only 24% believe that the market leaders of today will still be the market leaders in five years
• Pressure to drive down costs and provide low prices while maintaining high quality
• Global Drive for Innovation Ethics & Sustainability
• Pressure from customers and governments
• people demanding stronger commitment to social responsibility
• Call for higher ethical standards (Going Green) as a new business imperative Speed & Responsiveness
• Globalization and technological advance force organizations to respond quickly and decisively to environmental changes, organizational crises or shifting customer expectations
• Globalization has accelerated the pace at which organizations must roll out new products and services to stay competitive The Digital World
• The digital revolution has changed everything – not just how we communicate with one another, find information and share ideas, but also how organizations are designed and managed, how businesses operate and how employees do their job Diversity
• As organizations operate on a global playing field, the workforce – as well as the customers base grows increasingly diverse
• Nations domestic populations change dramatically Back…

Prof. Dr. Anja Tuschke

Organic and Mechanistic Design

Centralized Structure Specialized Tasks Many Rules, Formalized Vertical Communication Strict Hierarchy of Authority Typical Contingency Factors

• Large Size
• Efficiency Strategy
• Stable Environment
• Rigid Culture
• Manufacturing Technology Decentralized Structure Empowered Roles Few Rules, Informal Horizontal Communication Collaborative Teamwork Typical Contingency Factors
• Small Size
• Innovation Strategy
• Changing Environment
• Adaptive Culture
• Service Technology Top Management Provides direction, planning, strategy, goals and policies for the entire organization or major departments Technical Support Staff
• Helps the organization adapt to its environment
• E.g. engineers, researchers and information technology professionals
• Scan the environment for problems, opportunities and technological development
• Responsible for creating innovation in the technical core, helping, the organization change and adapt Middle management
• Management is distinctive function responsible for directing and coordinating other parts of the organization
• Middle management is responsible for implementation and coordination at the department level Administrative support staff
• Responsible for smooth operation and upkeep of the organization including its physical and human elements
• E.g. human resourcing (hiring), maintenance (cleaning, repairs, …) Technical Core
• People who do the basic work of an organization
• Primary transformation from inputs into outputs Back…

Prof. Dr. Anja Tuschke

Organizational Design

Performance and Effectiveness outcomes

Efficiency Refers to the amount of resources used to achieve the organization’s goals. It is based on the quantity of raw materials, money and employees, necessary to produce a given level of output. Doing things right! Is a broader term, meaning the degree to which an organization achieves its goals. Doing the right thing! Effectiveness The whole point of structural dimensions and contingency factors is to design the organization in such a way as to achieve high performance and effectiveness Stakeholder Approach Managers face the challenge of balancing the needs of various stakeholder groups in and outside of the organization that have a stake in the organization’s performance

Evolution

Efficiency is everything! Scientific Management emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity. Decisions based on rules of them and traditions were to be replaced with precise procedures developed after careful study of individual situations Administrative principles looked at the design and functioning of the organization as a whole. Administrative principles in particular contributed to the development of bureaucratic organizations which emphasized designing and managing organizations on an impersonal basis through such elements as clearly defined authority and responsibility, formal recordkeeping and uniform application of standard rules How to get organized? What about people? Interpretations of the Hawthorne studies concluded that positive treatment of employees improved their motivation and productivity Can Bureaucracie s be flexible? The ‘80s produced a new corporate culture that valued lean staff, flexibility and learning, rapid responses to the customer, engaged employees and quality products. Organizations began experimenting with teams, flattened hierarchies and managers began looking at the entire organizational system, including the external environment. Problems occur when organizations are treated as similar which was the case with scientific management and administrative principles Back…

Prof. Dr. Anja Tuschke

Questions

What is the difference between Organization Theory and Organization Behavior? Solution What is an Organization? Solution Why do organizations exist? Solution Which steps do you need to take to find the optimal organization design? Solution What are challenges for organizations? Solution What is the optimal organization design? Solution What is the organizational structure? Solution Which structural factors exist? Solution Which contingency factors exist? Solution What are key factors of mechanistic design? Solution Which contingency factors are associated with mechanistic design? Solution What are key factors of organic design? Solution Which contingency factors are associated with organic design? Solution Which key elements does an organizational chart have to include? Solution

Prof. Dr. Anja Tuschke

Questions

What is the difference between Efficiency and Effectiveness? Solution How did the organizational approach toward goals change (Efficiency is everything, …)? Solution What are advantages of large/ small size? What are disadvantages? Solution

Prof. Dr. Anja Tuschke

Elements of Organization Structure/ Efficiency vs. Learning Outcomes

Formal Reporting Relationships

• Number of levels in hierarchy
• Span of Control of managers and supervisors Grouping of Individuals
• Creation of departments Design of Systems
• Effective communication, coordination, and integration of efforts across departments Structural Framework or vertical hierarchy Pattern of interaction among employees or horizontal coordination/ hierarchy à Organization chart as visual representation of a whole set of underlying activities and processes in organizations CEO Vice President Finance Director Human Resources Vice President Manufacturing Chief Accountant Budget Analyst Plant Superintendent Maintenance Superintendent Training Specialist Benefits Administrator **Span of Control: Three employees Two employees Dominant Structural Approach Vertical Organization – Designed for Efficiency (Mechanistic) Horizontal Organization
• Designed for Learning (Organic) Horizontal Structure is dominant**
• Shared tasks, empowerment
• Relaxed hierarchy, few rules
• Horizontal communication, face- to-face
• Many teams and task forces
• Decentralized decision making Vertical Structure is dominant
• Specialized Tasks
• Strict hierarchy, many rules
• Vertical communication and reporting systems
• Few teams, task forces or integrators
• Centralized decision making Back…

Prof. Dr. Anja Tuschke

Consistent execution of strategy

Vertical Linkages coordinate activities between top and the bottom of the organization

• Hierarchical referral are the vertical lines, which identify the chain of command
• Rules and plans create vertical links
• Reports, computer systems and written information are vertical information systems to increase vertical information capacity Horizontal Linkages coordinate across organizational departments which are not traditionally drawn on the organizational chart - Information systems (e.g. Consulting firms need to create information systems to ensure a worldwide information flow at any time) - Liaison Roles - Task Forces - Full Time Integrator - Teams à Horizontal Coordination is Resource Intensive Three Indicators of Organization Design Requires Work Activities (What needs to get done?) - Departments are created to perform strategically important tasks Reporting Relationships (Who reports to who?) - The Chain of command, an unbroken line of authority, is represented by vertical lines on an organization’s flow chart Departmental Grouping Options (Who works together?) - Functional, Divisional, or modular/ virtual grouping Back…

Prof. Dr. Anja Tuschke

Virtual Networks and Outsourcing & Hybrid Structure

• Extend horizontal coordination beyond the boundaries of the organization
• Most common strategy is outsourcing o Contract out certain tasks/ functions
• Virtual or modular structures subcontract most of its major functions to separate companies
• The virtual network organization serves as a central hub with contracted experts
• BUT, dependence on the partner to deliver
• Conflict resolution through legal processes is largely unpredictable
• Danger of losing critical capabilities in one’s core business
  • Combinations of various structure approaches
  • Tailored to specific needs
  • Often used in changing environments
  • Greater flexibility
  • BUT: Also greater complexity and hence more challenging in making this organization work effectively and efficiently Virtual Networks & Outsourcing Hybrid Structure Each structure meets different needs and is a tool that can help managers be more effective Alignment and consistency is key Symptoms of structural Deficiency:
  • Decision making is delayed or lacking quality
  • Organization cannot meet changing needs
  • Employee performance declines, needs are not meet
  • Too much conflict Back…

Prof. Dr. Anja Tuschke

Questions

What is vertical/ horizontal hierarchy? Solution What does an organizational chart tell? Solution How is an organizational chart built? What is the span of control? Solution Which strategies are connected with vertical/ horizontal organizations? à What are key factors? Solution What are vertical/ horizontal linkages? Solution What are three indicators for organization design? Solution What are key elements of a functional structure? Solution What are key elements of a divisional structure? Solution What are key elements of a geographic structure? Solution What are key elements of a Matrix structure? Solution What are key elements of a horizontal structure? Solution What are virtual networks and outsourcing? Solution What is a hybrid structure? Solution What are symptoms of structural deficiency? Solution

Prof. Dr. Anja Tuschke

What is the Role of Strategy

External Environment

• Opportunities
• Threads
• Uncertainty
• Resource Availability SWOT-Analysis CEO/ Top Management Internal Situation
• Strength
• Weaknesses
• Distinctive Competence
• Past Performance Strategic Intent Define mission, official goals Select operational goals, competitive Strategies Organization Design - Structural-form learning - Information and control systems - Production technology - Human resource policies/ incentives - Organizational culture - Interorganizational linkages Effectiveness Outcomes - Goal Attainment - Resources - Efficiency - Strategic constituents Risk Property How much risk does the top management want to take The organization’s strategy is a plan for interacting with the competitive environment to achieve organizational goals. Goals define where the organization wants to go and strategies define how to get there The mission describes the organization’s vision , its shared values and reason for existence and is typically defined in a mission statement.
• It communicates to current and prospective stakeholders and legitimizes the organization’s business
• The vision is an aspirational description of what an organization would like to achieve in the mid-term or long-term future Operative goals can help to motivate employees toward goal accomplishment and act as guidelines for employee behavior and decision Making. They provide a standard for assessment of organizational performance in terms of e.g. profits, degree of employee satisfaction Operative goals: on average an individuum can follow 3-5 goals. Via incentives you can manipulate which goals are followed entirely Back…

Prof. Dr. Anja Tuschke

Selection of Strategy Tools

Porter’s Competitive Strategies Organizations may choose to focus broad or narrow in reaching multiple markets: Differentiation Strategy : Distinguish products or services from others in the industry Low-Cost-Leadership: Increase market share by keeping costs low compared to competitors Miles and Snow’s Strategy Typology The Miles and Snow typology is based on the idea that managers should seek to formulate strategy that matches the demands of the external environment. Prospector

• Learning orientation; flexible, fluid, decentralized structure
• Values creativity; risk-taking, and innovation
• E.g. 3M; Tata; GenerelElectric, … Defender
• Efficiency orientation; centralized authority and tight cost control
• Concerned with internal efficiency and control to produce reliable high-quality products for steady consumers
• E.g. DeutscheBahn; SW/M,… Analyzer
• Balances Efficiency and learning; tight cost control with flexibility and adaptability
• Mix of prospector & defender strategy
• Maintaining of a stable business while valuing innovation
• E.g. BMW; Siemens; Sony,… Reactor
• No clear organizational approach; design characteristics may shift abruptly depending on current needs
• E.g. NOKIA; Kodak;… How do Organizations asses the Achievement of goals? Effectiveness: Degree to which an organization realizes ist goals Efficiency: Amount or resources used to produce a unit of output Different ways to measure organizational effectiveness:
  • The Resource-based approach
  • The internal process approach
  • The goal approach
  • The Strategic Constituents approach à There is no one best way to organize à The key is alignment and consistency Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Threat of substitute products or services Rivalry among Existing competitors Porter’s 5 Forces Price Leadership Strategy Differentiation strategy Focused Price Leadership Strategy Focused Differentiation Strategy Strategy/ Source of Competitive Advantage Cost Uniqueness Broad Target Narrow Target Competitive Scope Organizations Internal Activities and Processes Product and Service Outputs Resource Inputs Goal Approach Internal Process Approach Resource Based Approach Employees Owners Government Suppliers Creditors Customers Community Back…