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Corporate revitalization often includes shifts in strategy or process or structure, but revitalization means a good deal moreit means a permanent rekindling of individual creativity and responsibility, a lasting transformation of the companys internal and external relationships, an honest-to-God change in human behavior on the job
Where We Are
Introduction & overview Strategies of change & conclusion EIS Simulation: The change process
Session 5
Organizational culture
values and norms that are shared by people/groups that control the way they act internally and externally. Values = beliefs about goals and appropriate standards for achievement (behaviors) Norms = expectations about behavior in specific situations and toward one another.
Organizational Culture
Espoused Values
individual values (CEO, managers) that the group adopts through validation (cognitive transformation to shared value) conscious and explicit - serve a normative or moral function to guide members in certain situations and in socializing members. Strategies - goals - philosophies
Organizational Culture
Basic underlying assumptions:
a solution to a problem that works repeatedly & becomes taken for granted cannot be confronted or debated and are difficult (if not impossible) to change. can only be changed through re-examination and re-evaluation of the cognitive structure. individuals will distort or deny rather than adopt thus culture at this level is a defense mechanism somajor change means managing at this level.
Organizational Culture
Socialization - how people learn the culture Consists of stories, myths, legends, etc.
influence of the founder organizational structure composition of TMT
Adaptive cultures - encourage and reward initiative/innovativeness - easiest to change Inert cultures - cautious and conservative, does not value initiative & may discourage
Organizational Culture
Strong Adaptive Cultures characterized by:
Bias for action - autonomy, risk-taking, entrepreneurship Coherent mission - sticks to knitting, close to customers Structured for flexibility
Empowerment
(Quinn and Spreitzer 1997)
Organizational Structure
Functional structure - groups people on the basis of common expertise & resources
Pro:
learning (transfer of knowledge within function) monitoring is easier processes become more efficient greater managerial control control becomes a problem as company grows communication and coordination (between functions) measurement (contribution of function) loss of strategic focus by TMT
Con:
Multi-Divisional Structure
Product lines or business unit is self-contained corporate HQ established for support & control
Divisional unit = operating authority HQ = strategic authority
Adv:
Financial control - easier to monitor Strategic control - time for TMT to focus on strategy Growth - add businesses or products Internal efficiency - allows clearer variance identification
Division/Corporate relationship Interdivisional competition - resources, parent attention Short-term focus Bureaucratic costs
Disadvantages:
Multi-Divisional Structures
Matrix Organization
Based on two forms of horizontal differentiation: functional and project/product Advantages:
Employees tend to be highly qualified, professional, & perform best in autonomous, flexible working conditions Employees can be moved from project to project leaves TMT to focus on strategy high bureaucratic costs constant movement of employees means $ two boss role can create conflict
Disadvantages:
Matrix Structure
Team Structure
Many companies use permanent crossfunctional teams
formed at the beginning of product development process and continued throughout implementation speeds innovation and customer responsiveness stronger in highly dynamic industries
Team Structure
Network Organizations
Core group of experts manages the outsourcing process closely This forms a hub & spoke type of organization consisting of many contracts Could create a control problem with contract organizations Example: Nike
Network Structure
.
Background
Shikhar Ghosh expertise in structural design Appex before Shikhar:
Small size: 20 employees, $2mil. Entrepreneurial Technology-driven, project-based Loosely structured Organizational culture: informal
Challenges:
Growing pains: consider Greiners 5 stages of growth From innovation to sustainable growth
Larry Greiner
Horizontal structure
Why does it not work for Appex at this stage?
Divisional structure
What is the rationale? Does it work?
Implications:
structure vs. culture as control device Strategic design in culture, strategy, HRM