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62 Cards in this Set

  • Front
  • Back
Organizational Culture
Sometimes called corporate culture; system of shared beliefs and values that develops within an organization and guides the behavior of its members.
-firms personality
*Edgar Schein
EX. Enron =Bad
Two Levels of culture:

I. Invisible: Core Culture
I. consists of values, beliefs and assumptions. Widely shared and rarely discussed, followed nearly automatically, "the way its always been done"
Two sources of invisible culture:
1) the vision, assumptions, and biases of the organization's founders

2)the outlook that internal employees learned from their own experiences in formative years
II. Visible: Observable culture
expressed in symbols, stories, heroes, and rites and rituals

a)An object, act, quality, or event that conveys meaning.
EX. 3M Gold Step trophy

b)A narrative based on true events, which is repeated—and sometimes embellished upon—to emphasize a particular value.
*Oral histories that are told and retold by member's about the organization's history.
EX. Home Depot: Rug at Christmas
c) Hero

d) Rites and Rituals
c)a person who's accomplishments embody the values of the organization
*motivate other employees to do the right thing
EX. Vince Lombardi

d) the activities and ceremonies, planned and unplanned, that celebrate important occasions in the organization's life
EX. Military, Mary Kay
Four Functions of Organizational Culture:
1) It gives members an organizational identity EX. Southwest Air

2) It facilitates collective commitment: gets everyone on the same page
EX. 3M

3) It promotes social-system stability: positive and reinforcing environment
EX. 3M-promote within, hire college grads

4) It shapes behavior by Helping employees make sense of their surroundings:
why org. does what it does and how it wants to accomplish goals
Cultures for Enhancing Economic Performance: Three Perspectives
1)Strength Perspective

2)Fit Perspective

3)Adaptive Perspective
1) Strength Perspective
Perspective of organizational culture that assumes that the strength of a corporate culture is related to a firm’s long-term financial performance.
"strong"= employees adhere to values b/c they believe in its purpose
*Strong cultures create goal alignment, employee motivation, and structure

CON: Employees/Managers become inwardly focused, arrogant, and resistant to change
2) Fit perspective
Perspective of organizational culture that assumes than an organization’s culture must align, or fit, with its business or strategic context.
*Correct fit~ Better $ Performance
3) Adaptive Perspective
Perspective of organizational culture that assumes that the most effective cultures help organizations anticipate and adapt to environmental change.

***Long term financial performance is highest for organizations with an adaptive culture.
11 Ways Culture Becomes Embedded in an Organization:
1) Formal Statements: organizational philosophy, mission, values, and materials for recruiting, selecting and socializing employees. EX. Wal-Mart

2)Slogans and Sayings: EX. Bank One- Whatever it takes

3)Stories, legends and Myths - used to implement values
EX. Costco's Jim

4) Leader reactions to Crises: sends clear cultural message. EX. American Apparel
11 Ways Culture Becomes Embedded in an Organization:
5) Role Modeling, Training, and Coaching: demonstrate culture
EX. Southwest Air: have fun

6) Physical Design: work environment/buildings EX. One-floor, open facility

7) Rewards, Titles, Promotions, and Bonuses- Traditional ways to reinforce behavior

8)Organizational Goals and Performance Criteria: for resruiting, selecting, developing, promoting, dismissing people. EX. Pepsi
11 Ways Culture Becomes Embedded in an Organization:
9) Measurable and Controllable Activities
EX. Exxon Mobil:"Efficiency in everything we do" - consistent returns, regardless of price of oil

10) Organizational Structure- Hierarchical Structure= control/authority. Flatter is usually better=Give employees more control

11) Procedures for Self-Development: individual objectives aligned with Organizational goals Ex. Capital one
a system of consciously coordinated activities or forces of two or more people.
Three types of Organizations and their purposes:
A. For-Profit: formed to make money, or profits, by offering products or services

B. Nonprofit: formed to offer services to some clients, but not make a profit.

C. Mutual-Benefit Organizations: voluntary collectives whose purpose is to advance member's interests(unions, trade organizations)
Organization Chart
Box-and-lines illustration of the formal relationships of positions of authority and the organization’s official positions or work specializations.
*Family tree like pattern of boxes
Two kinds of info. in Organizational Charts:

a) vertical hierarchy of authority

b) horizontal specialization
a)Who reports to whom : chain of command
-official communication network: who talks to whom

b)who specializes in what work/different jobs
Edgar Schein's 4 Common elements of an organization:

1) Common purpose

2) Coordinates Effort
1)A goal that unifies employees or members and gives everyone an understanding of the organization’s reason for being.

2)The coordination of individual efforts into a group or organization-wide effort.
Edgar Schein's 4 Common elements of an organization:

3) Division of Labor

4) Hierarchy of Authority
3)Also known as work specialization; arrangement of having discrete parts of a task done by different people. The work is divided into particular tasks assigned to particular workers.

4) Also known as chain of command; a control mechanism for making sure the right people do the right things at the right time.
*someone needs to direct the work of others
*Most effective when arranged in a hierarchy
Unity of command
Principle that stresses an employee should report to no more than one manager in order to avoid conflicting priorities and demands.
3 More Elements of Organizations

5) Span of Control (Management)
The number of people reporting directly to a given manager.
Two kinds:
Narrow and Flat
a. narrow span of control

b. wide span of control

*meanings of WIDE and FLAT
a. manager has a limited number of people reporting
*tall= many levels with narrow spans of control

b. manager has many people reporting to them
*flat= only a few levels with wide spans of control

- it depends on the organization as to which is best. Complex=Narrow, First-line= Wide
-Trend= lean management for autonomy in decisions
6) a. Accountability


a. managers must report and justify work results to the managers above them *Authority
-Must be Responsible

b.The obligation one has to perform the assigned tasks.
-Authority and Responsibility should be equal

c. The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy.
the rights inherent in a management position to make decisions, give orders, and utilize resources

*managers have a legitimate right to issue orders
a)Line Managers

b)Staff personnel

*see notes
a)Managers who have the authority to make decisions and usually have people reporting to them.

b)Staff with advisory functions; they provide advice, recommendations, and research to line managers. (usually horizontal lines)
7) a. Centralized Authority
a. Organizational structure in which important decisions are made by upper managers—power is concentrated at the top.
-Smaller Companies

ADV: Less duplication of work; procedures are uniform and easy to control
7) b. Decentralized Authority
b)Organizational structure in which important decisions are made by middle-level and supervisory-level managers—power is delegated throughout the organization.

ADV: managers encouraged to solve their own problems; decisions are made more quickly= flexibility and efficiency
I. Simple Structure
The first type of organizational structure, whereby an organization has authority centralized in a single person, as well as a flat hierarchy, few rules, and low work specialization.
-usually in early stages of firm
II. Functional Structure
The second type of organizational structure, whereby people with similar occupational specialties are put together in formal groups.
III. Divisional Structure
The third type of organizational structure, whereby people with diverse occupational specialties are put together in formal groups according to products and/or services, customers and/or clients, or geographic regions.
a) Product divisions

b) Customer divisions

c) Geographic divisions
a)A divisional structure in which activities are grouped around similar products or services.
EX. Time Warner

b)A divisional structure in which activities are grouped around common customers or clients.EX. Ford

c)A divisional structure in which activities are grouped around defined regional locations. EX.the Fed
IV. Conglomerate Structure
The fourth type of organizational structure, whereby divisions are grouped around similar businesses or activities.
Large scale version of divisional
large company that is doing business in different, quite unrelated areas
EX. Tyco
V. Hybrid Structure
an organization uses functional and divisional structure in different parts of the same organization
EX. GM= Product Divisional + Functional (w/in each group)
VI. Matrix Structure
Sixth type of organizational structure, which combines functional and divisional chains of command in a grid so that there are two command structures—vertical and horizontal.
EX. Ford- Horizontal=Functional,
Vertical=Product divisional
VII. Team-Based Structure
Seventh type of organizational structure, whereby teams or workgroups, either temporary or permanent, are used to improve horizontal relations and solve problems throughout the organization.
-Teams are Cross-functional
-No barriers b/w divisions
VIII. Network Structure

*virtual organizations
Eighth type of organizational structure, whereby a central core is linked to outside independent firms by computer connections, which are used to operate as if all were a single organization.
-the glue that holds everything together is information technology and strategic alliances/contractual agreements with supplier companies.
*boundaryless organization
organization that operates with extensive, even worldwide operations, yet the basic core can remain small
*contingency approach to management
a manager's approach should vary according to, that is be contingent on, the individual or environmental situation
Contingency Design
The process of fitting the organization to its environment.
Consider these 5 Factors in designing structure:
1) Environment- Mechanistic vs. organic
2) Environment- Differentiation vs. Integration
3) Size
4) Technology
5) Life Cycle
1) A.Mechanistic Organization
Organization in which authority is centralized, tasks and rules are clearly specified, and employees are closely supervised.

-bureaucratic, rigid rules and top-down communication
EX. McDonald's
*Works best when org. is operating in a stable environment
B. Organic Organization
Organization in which authority is decentralized, there are fewer rules and procedures, and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks.
-Loose structure, improvise as they go along
EX. companies/ virtual organizations
2) A. Differentiation
The tendency of the parts of an organization to disperse and fragment.
-arises form technical specialization and division of labor
-like different product divisions
B. Integration
The tendency of the parts of an organization to draw together to achieve a common purpose.
-specialists work together to achieve a common goal

DONE THROUGH: formal chain of command, standardization of rules and procedures, use of cross-functional teams/computers so there is frequent communication and coordination of the parts.
3) Organizational Size
Measurement of a group’s size according to the number of full-time employees.
Size Trends= Large Orgs.
-Organizations with 2000+ full time employees have more rules, regulations, procedures, and more job specialization
-more decentralized
**more mechanistic
Size Trends= Small Orgs.
-maximum of 1000 employees
-more informal, fewer rules and regulations, less work specialization
-More organic
All the tools and ideas for transforming material, data, or labor (inputs) into goods or services (outputs). It applies not just to computers but any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product.
3 Forms of Technology:

(Increasing levels of complexity)
a)Small batch

b)large batch

a) Small-Batch Technology
a)System in which goods are custom-made to customer specifications in small quantities.
-least complex
-companies are usually organic
b) Large-batch Technology
mass production assembly-line technology; Routinized products made by highly mechanized organizations.
- more specialization and bureaucratic
c) Continuous-Process technology
A highly routinized technology in which machines do all of the work, to produce highly routinized products. Ex. Nuclear power plant
-successful= more organic than mechanistic
5)Organizational Life Cycle
Four-stage cycle with a natural sequence of stages: birth, youth, midlife, and maturity.
-Organizations become larger and more bureaucratic, mechanistic, specialized and decentralized
a. Birth Stage
The nonbureaucratic stage, the stage in which the organization is created.
-no written rules, little if any supporting staff
b. Youth stage
b.The stage in which the organization is in a prebureaucratic phase, one of growth and expansion.
-people added to payroll, some rules/division of labor
c. Midlife stage
c.A period of growth evolving into stability when the organization becomes bureaucratic.
-staffs of specialists, decentralization of functional divisions, many rules
d. Maturity Stage
d.stage in which the organization becomes very bureaucratic, large and mechanistic.
-danger of becoming inflexible, lack of innovation
*learning organization
an organization that actively creates, acquires, and transfers knowledge within itself and is able to modify it's behavior to reflect new knowledge.
3 Reasons Why Resistance to Learning may Occur:
1) People believe competition is better than collaboration
- cant be more concerned with looking good than doing good
-Must focus on long-term solutions

2)Fragmentation leads to specialized Fiefdoms that Resist Learning
-tends to erect walls b/w specialists in functional areas

3) Unless Encouraged, People Won't take risks, the basis for learning
-people resist change
-learning requires taking risks /making mistakes

*common paradigm in

*new paradigm
generally accepted ways of viewing the world

*competition superior to collaboration-needs to change!
->evidence-based management

*Everyone in an organization is in business together-everyone has a responsibility for working toward common goals