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106 Cards in this Set

  • Front
  • Back
What is an organization?
An grouping of people and resources to provide goods and services to satisfy a need
What is an Entrepreneurship?
Someone who recognizes an unmet need and marshals resources to address those needs in new/innovative ways.
What are some different forms of entrepreneurship?
1. For Profit
2. NFP
3. Combo (Social Entrepreneurship)
What are the five reasons for an organization to exist?
1. Increase specialization and the div of labour
2. Use large-scale technology
3. Manage the external environment
4. Economize on transaction costs
5. Exert power and control
What are some advantages of specialization of labour?
1. People can become more skilled
2. People working together create more value than working alone
3. Helps to facilitate innovation & quality
What are economies of scale?
Cost savings that result when goods and services are produced in large volume on automated production lines.
What are economies of scope?
Cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across different products or tasks.
What are transaction costs?
The costs associated with negotiating, monitoring, and governing exchanges between people.
What are operative goals?
Specific short and long term targets that guide managers to design effective work processes.
SMART goals = ?
Specific, Measurable, Attainable, Realistic, and Time-bound
What are the four basic design challenges?
1. Differentiation
2. Differentiation vs. Integration
3. Decentralization vs. Centralization
4. Specialization vs. Mutual Adjustment
What are the five different functions in an organization?
1. Support
2. Production: Good or service
3. Maintenance
4. Adaptive: R&D, planning
5. Managerial: acquisition, investments
What is a self-contained division?
A division that contains its own set of support functions.
What is vertical differentiation?
Refers to the way an organization creates reporting relationships to link the roles and subunits.
What is horizontal differentiation?
Refers to the way an organization creates subunits of different roles.
What is subunit orientation?
A tendency to view one's role for how it effects one's subunit instead of the how it effects the entire organization.
What are some integrating mechanisms?
1. Hierarchy of Authority (most complex)
2. Direct Contact
3. Liaison Roles
4. Task Force
5. Teams
6. Full-time integrating roles (least complex)
What is the difference between a mechanistic and organic structure?
Mechanistic: Highly centralized, standardized and typically predictable

Organic: Decentralized, requires mutual adjustment, good for quick adaptation.
What is the contingency theory (related to structure)?
A theory that says a manager builds an organizational structure around the level of uncertainty an organization faces.
What is the difference between standardization and mutual adjustment?
Standardization: written rules, SOP's, etc.

Mutual Adjustment: face-to-face discussions to coordinate tasks.
What is formalization?
Written rules and typically follows from a centralized structure.
Who suggested that organizations functioning in more uncertain environments should adopt an organic structure?
Burns and Stalker

Lawrence & Lorsch
What happened to the price tag on audits in the 1980's?
They were driven down to $0 in exchange for the high fees on follow up consulting.
What happened to the culture of accounting firms when they began growing rapidly?
Shifted from professional services focus to profit-driven industry.

"Keep the client happy" is also followed.

Firms are no longer accountants, but "information professionals"
What is the basic problem with the agency theory?
Employees do not act in the best interests of the organization and managers must work to align the goals of employees and the organization.
What were the Hawthorne studies?
The theory is that people will work harder if they think they are being watched. (Panopticon)
Does direct supervision become easier or harder when you make a organizational structure taller?
Easier
After reaching how many employees does the number of hierarchial levels tend to flatten out?
3000 employees; 7 levels
Does the marginal addition of managers increase or decrease when an organization grows in size?
Decreases
What are some problems with tall hierarchies?
1. Communication
2. Motivation
3. Bureaucratic costs
What is 'Parkinson's Law'?
1. An official wants to increase subordinates not rivals
2. Officials make work for one another

"Work expands so as to fill the time available"
What is the definition of span of control?
The number of subordinates a manager manages directly.
Do complex, similar, or inter-related tasks make span of control easier to control?
Similar. Its easier for a manager to watch 10 people if they should all be doing the same thing (standardization).
What are some ways to flatten a hierarchy?
1. Horizontal differentiation: increases functions and divisions
2. Decentralization: pushes control and authority out to divisional managers
3. Standardization: eliminates the need for so many managers if everyone is following strict rules and SOP's.
What is a tournament?
When managers make divisions compete by doing the same task.

Ex. two R&D teams competing to produce the next big drug for a pharmaceutical company.
What was the EMI case about?
Top managers had no desire to sign new artists and were not motivated. Therefore, they did not sign Guns 'n Roses.
What was the Union Pacific case about?
Centralized structure contributed to delays in delivery when demand increased.
What is bureaucracy?
A form of organizational structure in which people can be held accountable for their actions because they are required to act in accordance with rules and standard operating procedures.
What are the principles of bureaucracy?
1. A bureaucracy is founded on the concept of rational-legal authority.
2. Organizational roles are held on the basis of technical competence, not because of social status, kinship, or heredity.
3. A role's task responsibility and decision-making authority and its relationship to other roles in the organization should be clearly specified.
4. The organization of roles in a bureaucracy is such that each lower office in the hierarchy is under the control and supervision of a higher office.
5. Rules, SOP's, and norms should be used to control the behaviour and the relationships among roles in an organization.
6. Administrative acts, decisions, and rules should be formulated and put in writing.
What is role conflict?
The state of opposition that occurs when two or more people have different views of what another person should do and, as a result, make conflicting demands on that person.
What is role ambiguity?
The uncertainty that occurs for a person whose tasks or authority are not clearly defined.
What are advantages of bureaucracy?
1. Differentiation becomes easy because the best person is selected for each job
2. Centralization because there are clear definitions of who is responsible for what.
3. Standardization helps with integration because everyone knows what other ppl should be doing.
What are the disadvantages of bureaucracy?
1. Too much reliance on SOP's and rules
2. Become too tall.
3. Doesn't address the informal organization.
What is a functional structure?
A design that groups people on the basis of their common expertise and experience or because they use the same resources.
What are contingent workers and what is an advantage and a disadvantage?
They are temporary workers hired for a specific task.

Adv: makes org flexible, and reduces costs of benefits

DisAdv: No motivation for temp workers (no benefit package).
What was the main issue in the Cirque case?
The company grew to perform in numerous countries and was shifting from a centralized to a decentralized HR structure.
What are advantages of a functional structure?
1. Provides people with the ability to learn from one another in a specialized area.

2. People can supervise each other within a specialized group.

3. Norms are developed that allow groups to become more effective.
What are some control problems in a functional structure?
1. Communication: functions see things differently and are seperate

2. Measurement: it is hard to isolate the costs associated with each function.

3. Location: different functions work better in different locations.

4. Customer: Tailoring products to a larger group of people is hard.

5. Strategic: Coordination problems take so much time, that strategy gets lost.
What is a divisional structure?
A structure in which functions are grouped according to the specific demands of products, markets, or customers.
What is a product structure?
A divisional structure in which products (goods and services) are grouped into separate divisions according to their similarities or differences.
What is a product division structure?
A divisional structure in which a centralized set of support functions services the needs of a number of different product lines.

Good for a company that provides broadly related products.
What is a multi-divisional structure?
A structure in which support functions are placed in self-contained divisions.
What is another name for a multi-divisional structure?
M-Form / Conglomerate
Is an M-form structure more conducive to related or unrelated products?
Unrelated
What are advantages to the multidivisional structure?
1. Increased effectiveness

2. Increased control

3. Profitable growth

4. Internal labour market
What are disadvantages to the multidivisional structure?
1. Managing corporate-divisional relationships

2. Communication problems

3. Coordination problems between divisions

4. Transfer pricing

5. Bureaucratic costs
What is a product team structure?
A divisional structure in which specialists from the support functions are combined into product development teams that specialize in the needs of a particular kind of product.
What are advantages of a product team structure?
1. More decentralized than a functional structure.

2. Self-contained divisions increase integration

3. Quick decisions.
What structure do "two-boss employees" typically get associated with?
Matrix structure
What are some features of a matrix structure?
Flat, decentralized, organic
What are some advantages of a matrix structure?
1. Cross functional teams lower functional barriers

2. Increase communication

3. Maximum use of skilled professionals

4. Promotes concern for quality and cost
What are disadvantages of a matrix structure?
1. Lacks advantages of a bureaucracy

2. Role conflict and ambiguity

3. Lacks a clearly defined hierarchy.
Why is Parkinson's Law an agency problem and how can an organization address this issue?
Managers hire subordinates in their own interersts, against the organization's.
It can be addressed by:
1. implementing policies for approval by CEO/higher management for any new recruitment.
2. Implement Principle of Minimum Chain of Command.
What is a geographic divisional structure?
A divisional structure in which divisions are organized according to the requirements of the different locations in which an organization operates.
What is a market divisional structure?
1. Centralized support functions

2. Divisions serve a different customer deomgraphic.
What is a network structure?
A group of companies acting together based on contracts and agreements (ie. Apple)
What are advantages of the network structure?
1. Production costs are reduced

2. Bureaucratic costs are avoided

3. Allows an organic response
What are disadvantages of a network strategy?
1. Requires a lot of mutual adjustment

2. Communication difficulties

3. Difficult to control partners behaviour.
What is a strategy?
A specific pattern of decisions and actions that an organization makes to leverage core competencies to create a competitive advantage
What are core competencies?
An organizations skills and abilities in value creation activities that allow it to achieve its goals.
What is the 'resource based view' of the firm?
Resource = anything that supports the orgs productive activities

Capabilities: An orgs ability to coordinate various resources

Dynamic Capabilities: the ability to alter resources as required by environmental change
What does a resource need to create a competitive advantage?
1. Valuable

2. Inimitable: unique and not easily copied.
Sources of inimitability are:
1. Patents/legal barriers/trade secrets

2. Causal Ambiguity

3. Historical development
What is a competitive assymetry?
A fake brand or a stolen trademark.
A plan of action to strengthen an organizations functional and organizational resources, as well as its coordination abilities, in order to create core competencies.
Functional level strategy
A plan to combine functional core competencies in order to position the organization so that it has a competitive advantage in its chosen domain.
Business level strategy
A plan to use and develop core competencies so that the organization can not only protect and enlarge its existing domain but can also expand into new domains
Corporate level strategy
A plan that involves choosing the best strategy to expand into overseas markets to obtain scarce resources and develop core competencies
Global level strategy
What type of structure best supports a differentiation strategy?
Complex structure, decentralized, high differentiation, high integration, organic structure
What type of structure best supports a low-cost strategy?
Simple structure, centralized, low differentiation, low integration, mechanistic structure.
One way to address problems with Bureaucracy is through Management by Objectives. What is the 3 step process?
1. Specific goals & objectvies developed at each level.
2. Managers & subordinates develop the sub units' goals.
3. Managers & sub units cyclically review their progress. (pay and promotions typically linked to performance)
If Westjet starts building planes, this is an example of...?
Vertical Integration / Corporate level strategy
Related diversification vs Unrelated diversification? (Ex. McDonalds)
Related: They start farming cows

Unrelated: They start making cars
What are the different global strategies?
1. Multi-domestic: decentralized control to different global locations

2. International Strategy: R&D and Marketing are centralized, rest is decentralized

3. Global Strategy: focused on cost reduction and locates everything in the cheapest location for that function.

4. Transnational Strategy: local responsiveness and cost reduction; some decentralization
What is craftswork?
The technology that involves groups of skilled workers who interact closely to produce usually limited numbers of custom designed products.
What is the external resource approach to technology?
To use technology to help control the external environment
What is the internal systems approach to technology?
To use technology to help increase the success of attempts to innovate, develop new products, etc.
What is the technical approach to technology?
To use technology to improve efficiencies.
What is programmed technology?
A technology in which the procedures for converting inputs into outputs can be specified in advance so that tasks can be standardized and the work process can be made more predictable.
What is technical complexity?
The measure by which the ability to program a process.

The higher the complexity the easier it is to program in advance and have a machine do it.
What are the three types of production technology according to Joan Woodward?
1. Small Batch: Low quantity, unique product and has very low technical complexity because it cannot be programmed.

2. Mass Production

3. Continuous Process: High technical complexity (flowing oil through pipes). Easily programmed.
Who spoke about the technological imperative and what is it?
Joan Woodward

The argument that technology determines structure
What study went against Woodward and was also done at the UofA?
The Aston studies

Barley said the same technology could lead to two structures.
What is task variability (Charles Perrow)?
The number of exceptions - new or unexpected situations - that a person encounters while performing a task.
What is task analyzability?
The degree to whcih search activity is needed to solve a problem (ie. does it require human thought and research?)
Low Variability & Low Analyzability?
Craftswork
Low Variability & High Analyzability?
Routine Manufacturing
High Variability & Low Analyzability?
Non-Routine Research
High Variability & High Analyzability?
Engineering Production
What is task interdependance? (James Thompson)
The manner in which different organizational tasks are related to one another.
What is mediating technology?
A technology characterized by a work process in which input, conversion, and output activities can be performed independently of one another. (Sales Team acting individually)
What is long-linked technology?
A technology characterized by a work process in which input, conversion, and output activities must be performed in series. (Assembly line)
What is intensive technology?
A technology characterized by a work process in which input, conversion, and output activities are inseperable. (hospital)
What was the Eagle case about?
It was a recruitment company with a flat structure that worked really well.
What was the Dell/Apple case about?
Dell - involved employees/decentralized

Apple - centralized and authoritative.
What was the AOL-Time Warner case about?
AOL was used to being decentralized and in teams, Warner was hierarchal and tall.

AOL culture dominated.