Long

Tid-bits from Chapter 2

1

What do you wish to do?Why?Write a “future” mission statement.Write a vision.Develop a strategy.Develop goals to actionize strategy.

(strategic direction)Strategic direction: (opportunities, threats,

uncertainty, resource availability, strengths, distinctive competence, leader style, past performance)

Long 2

Do you have a competitive advantage?Core competencies?Formulating strategies: Porter model and

Miles and Snow strategy typologyPorter: Differentiation vs low-cost

leadershipMiles and Snow: Prospector, Defender,

Analyzer, ReactorFour Effectiveness Approaches: Goal

approach, Resource-based approach, Internal process approach, Strategic constituents approach

Long

What is Structure?

3

Designates formal reporting relationships

Identifies grouping of individuals into units and units into the organization

Includes design of systems to ensure communication, coordination and integration of effort

Long 4

Designed for efficiency: Centralized

Designed for learning: Decentralized

Long

Information-sharing Perspective on Structure

5

Design: Provide both vertical and horizontal information flow to accomplish organizational goals. If structure doesn’t fit, people will have either too little information or spend time processing information not vital to their tasks.

Vertical linkages are designed primarily for control. Horizontal linkages are designed for coordination and collaboration, which usually means reducing control.

Long

Design Options for Grouping Employees into Departments

6

Engineering Marketing Manufacturing

CEO

FunctionalGrouping

DivisionalGrouping

CEO

Division A Division B Division C

MGT 4153Dr. Rebecca Long

Technology

Long

What is Technology? (pages 259-261)

8

Core

Non-Core

Work processes, techniques, machines, and actions used to transform organizational inputs (materials, information, ideas) into outputs (products and services)

Core vs Non-Core

9

Core technology is the work process that is directly related to the organization’s mission, such as teaching in a school, medical services at a medical clinic

Non-core technology is a department work process that is important to the organization but is not directly related to its primary mission. (HR, Accounting, R&D, Marketing)

Long 10

What is the difference between manufacturing technology and service technology?

Manufacturing: Core technology begins with raw materials (e.g., steel, aluminum, composite metals) if their products are created using those materials.

Service: (UPS) Includes production equipment to sort and transport the product and procedures to ensure that the product is delivered on time and in good condition.

Long

Joan Woodward (British industrial sociologist)

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Developed a scale and organized the firms she studied according to technical complexity of the manufacturing process. Technical complexity (page 262) represents the extent of mechanization of the manufacturing process.High Technical Complexity: Most of the work done by machines.Low Technical Complexity: Workers play a larger role in the production process.

Long

Woodward’s Manufacturing Technologies

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Group I (Low Technical Complexity) (organic)Small-batch and unit production (job shops,

small orders, relies heavily upon the human operator) Custom work the norm. (Kelly handbags hand-sewn) (page 262)

Group II (Mechanistic)Large-batch and mass production

(characterized by long production runs of standardized parts [traditional assembly lines]) (page 263)

Group III (High Technical Complexity) (Organic)Continuous process production (entire process

is mechanized) (page 263)

Long

Flexible Manufacturing Systems (page 268)(Also called computer-integrated manufacturing, smart factories, advanced manufacturing technology, agile manufacturing, or the factory of the future. FMS links together manufacturing components that previously stood alone. Robots, machines, product design and engineering analysis are coordinated by a single computer system). Result of:

13

Computer-aided design(CAD)

Computer-aided manufacturing(CAM)

Integrated Information Network

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Lean Manufacturing: Uses highly trained employees at every stage of the production process, who take a painstaking approach to details and problem solving to cut waste and improve quality.The heart of lean manufacturing is people, not machines. Employees are trained to attack waste and strive for continuous improvement in all areas. One lesson of LM is that there is always room for improvement. (pages 269-272)

Mass & Flexible Manufacturing(page 272)

Characteristic Mass Production FMS

Structure:

Span of Control Wide Narrow

Hierarchical levels Many Few

Tasks Routine, repetitive Adaptive, craft-like

Specialization High Low

Decision making Centralized Decentralized

Overall Bureaucratic, mechanistic

Self-regulating, organic

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Manufacturing versus Service Technologies (page 274, Exhibit 7.7)

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Manufacturing

1. Tangible product2. Products can be inventoried for

later consumption 3. Capital asset intensive4. Little direct customer interaction5. Human element may be less

important6. Quality is directly measured7. Longer response time is

acceptable8. Site of facility is moderately

important

Service

1. Intangible product2. Production and consumption

take place simultaneously 3. Labor and knowledge intensive4. Customer interaction generally

high5. Human element very important6. Quality is perceived and difficult

to measure7. Rapid response time is usually

necessary8. Site of facility is extremely

importantService:

Airlines, Hotels, Consultants,Healthcare, Law firms

Product and Service: Fast-food outlets, Cosmetics,

Real estate, Stockbrokers,Retail stores

Product: Soft drink companies,

Steel companies, Auto manufacturers,

Food processing plants

Service versus Product Organizations(page 277, Exhibit 7.8)

Service ProductStructural Characteristics: Separate boundary roles Few Many

Geographical dispersion Much Little

Decision making Decentralized Centralized

Formalization Lower Higher

Human Resources:

Employee skill level Higher Lower

Skill emphasis Interpersonal Technical

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Department level of analysis for departments not necessarily within

the technical core (pages 279-280)

Analyzes the nature of departmental technology and its relationship with departmental structure, developed by Charles Perrow.

He specified two dimensions of departmental activities relevant to organizational structure and process.

Variety – The frequency of unexpected and novel events that occur in the conversion process. Are work processes performed the same way every time or differ from time to time.

Analyzability – Can the work be reduced to mechanical steps and can participants follow an objective, computational procedure to solve problems?

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Departmental Technologies (280-281)

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NONROUTINELow analyzabilityHigh variety

Examples: Strategic planning

Social science Applied research

ROUTINEHigh analyzabilityLow variety

Examples: Sales Clerical

Drafting

Auditing

ENGINEERINGHigh analyzabilityHigh variety

Examples: Legal Engineering Tax accounting General accounting

CRAFTLow analyzabilityLow variety

Examples: Performing arts Trades Fine goods mfg.

Department Technology & Structural/Management Characteristics (283)

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Mechanistic Structure1. High formalization2. High centralization 3. Little training or experience4. Wide span5. Vertical, written communications

ROUTINE

Mostly Mechanistic Structure1. Moderate formalization2. Moderate centralization 3. Formal training4. Moderate span5. Written and verbal communications

ENGINEERING

Mostly Organic Structure1. Moderate formalization2. Moderate centralization 3. Work experience4. Moderate to wide span5. Horizontal, verbal communications

CRAFT

Organic Structure1. Low formalization2. Low centralization 3. Training plus experience4. Moderate to narrow span5. Horizontal communications meetings

NONROUTINE

Long 21

Key to Previous Slide:

1. Formalization2. Centralization3. Staff qualifications4. Span of control5. Communication and

coordination

Long

Implications of Thompson’s Interdependence (pages 284 & 285)

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Form of Interdependence

Demands on Horizontal

Communications, Decision Making

Type of Coordination

Required

Priority for Locating

Units Close Together

Pooled (bank)Low

communication

Standardization, rules, procedures

Divisional StructureLow

Sequential (assembly line) Medium

communication

Plans, schedules, feedback

Task ForcesMedium

Reciprocal (hospital)High

communication

Mutual adjustment, cross-departmental meetings, teamwork

Horizontal Structure

High

Client

Client

Client