Ch. 11: Organizational Structure

Front 1

Identify five traditional organizational structures.

Back 1

1. Simple
2. Functional
3. Divisional
4. Strategic Business Unit
5. Holding Company

Front 2

Identify the pros and cons of the "Holding Company" organizational structures.

Back 2

○ Pro's: Cost savings.
○ Con's: Corporate office is dependent on each business unit's management team. lack of control over the decisions of those managers.

Front 3

Identify the pros and cons of the "Strategic Business Unit" organizational structures.

Back 3

○ Pro's: Rapid response, closer proximity to development and implementation, CEO can make broader decisions, focused accountability, Functional specialization within each division, good management training, good focus on products and markets, quick response to change.
○ Con's: Potential competition for resources, deciding level of authority for managers, potential policy inconsistencies among divisions, distribution of costs, increased cost via duplicate functions, difficulty maintaining overall corporate image.

Front 4

Identify the pros and cons of the "Divisional" organizational structures.

Back 4

○ Pro's: Efficient, expertise, centralized control of decisions.
○ Con's: Narrow specialization, functional rivalry and conflict, difficult functional coordination, limited development of managers, may cost more.

Front 5

Identify the pros and cons of the "Functional" organizational structures.

Back 5

○ Pro's: Higher focus on work.
○ Con's: Need effective coordination of the functional units. Potential of conflict between units.

Front 6

Identify the pros and cons of the "Simple" organizational structures.

Back 6

○ Pro's: Allows rapid response to market shifts. Ability to accommodate. Encourage employee multitasking.
○ Con's: Demanding on the owner. May miss strategic issues. May limit future development.

Front 7

Describe the product-team structure.

Back 7

○ Assigns functional managers and specialists to a new product, project, or process team that is empowered to make major decisions about their product.
○ Team members are assigned permanently in most cases.

Front 8

Explain why the product-team structure is a prototype for a more open, agile organizational structure.

Back 8

Team members are assigned permanently, which can reduce cost while speeding up innovation and responsiveness.

Front 9

Explain five ways improvements have been sought in traditional organizational structures.

Back 9

1. Redefining the role of corporate headquarters.
2. Rebalancing the need for control versus coordination.
3. Adjusting and reengineering the structure to emphasize strategic activities.
4. Downsizing.
5. Moving toward self-managing operational activities

Front 10

Describe what is meant by agile, virtual organizations.

Back 10

Identifies a set of business capabilities central to high-profitability operations and then builds a virtual organization around those capabilities, allowing the agile firm to build its business around the core, high-profitability information, services, and products.

Front 11

Pros and cons of outsourcing.

Back 11

Pros:
○ It can lower costs incurred when the activity outsourced is done in-house.
○ It can reduce the amount of capital a firm must invest in production or service capacity.
○ The firm’s managers and personnel can concentrate on mission-critical activities.
○ This concentration and focus allow the firm to control and enhance the source of its core competitive advantage.
○ More expertise.

Cons:
○ Outsourcing involves loss of some control and reliance on “outsiders.”
○ Outsourcing can create future competitors.
○ Skills important to a product or service are “lost.”
○ Outsourcing may cause negative reaction from the public and investors.
○ Crafting good legal agreements, especially for services, is difficult.
○ The company may get locked into long-term contracts at costs that are no longer competitive.
○ Cost aren’t everything: What if my supplier underbids?
○ Outsourcing can lead to increasingly fragmented work cultures where low-paid workers get the work done with little initiative

Front 12

Describe boundaryless organizations and why they are important.

Back 12

absence of internal and external “boundaries” between units, levels, and locations that lessen their company’s ability to generate knowledge, share knowledge, and get knowledge to the places it can be best used to create value.

Front 13

Explain why organizations of the future need to be ambidextrous learning organizations.

Back 13

It's where the money is.

Front 14

Define "Simple" organizational structure.

Back 14

There is an owner and a few employees and where the arrangement of tasks, responsibilities, and communication is highly informal and accomplished through direct supervision.

Front 15

Define "Functional" organizational structure.

Back 15

the tasks, people, and technologies necessary to do The work of the business are divided into separate “functional” groups (e.g., marketing, operations, finance) with increasingly formal procedures for coordinating and integrating their activities to provide the business’s products and services.

Front 16

Define "Divisional" organizational structure

Back 16

A set of relatively autonomous units, or divisions, are governed by a central corporate office but where each operating division has its own functional specialists who provide products or services different from those of other divisions.

Front 17

Define "Strategic Business Unit" organizational structure.

Back 17

An adaptation of the divisional structure in which various divisions or parts of divisions are grouped together based on some common strategic elements, usually linked to distinct product/market differences.

Front 18

Define "Holding Company" organizational structure.

Back 18

The corporate entity is a broad collection of often unrelated businesses and divisions such that it (the corporate entity) acts as financial overseer “holding” the ownership interest in the various parts of the company, but has little direct managerial involvement.