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bateman.Chap009.2 - Organizational Agility Organizational...

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Unformatted text preview: Organizational Agility Organizational Question of the Day Question Productivity has increased during the economic crisis due to efficiency changes such as cross­training and learning how to get more done with fewer people. Organizations are slow to increase hiring due to the fear of an uncertain economic recovery. Employees are motivated to work hard to retain their current job. Why are many organizations reluctant to hire new employees? Why are employees more productive during an economic crisis? “It is change, continuing change, It inevitable change, that is the dominant fact in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be.” is, Isaac Asimov Isaac Asimov 9-3 Thoughts on Organizational Agility Agility All approaches to organizing have both strengths and weaknesses Advantages tend to be short­lived if they remain fixed rather than flexible Successful organizations do not sit still but continually to meet new competitive demands The Responsive Organization The Organization structures and systems must remain adaptable The formal structure controls people but today responsiveness if vital The Responsive Organization The Mechanistic organization • A form of organization that seeks to maximize internal efficiency • Based on Weber’s bureaucratic organization • Relatively inflexible The Responsive Organization The Organic structure • An organizational form that emphasizes flexibility • Jobholders have broader responsibilities that change as the need arises • Communication occurs through advice and information rather than through orders and instructions • Decision making and influence are more decentralized • Expertise is highly valued • Jobholders rely more heavily on judgment than on rules • Obedience to authority is less important than commitment to the organization’s goals • Employees depend more on one another and relate more informally and personally Organization Chart Shows Who’s on Top Top Figure 9.1(a) 9-8 Advice Network: Knowledge Flows Advice Organizing Around Core Competencies Competencies Core competence • The capability that underlies a company’s ability to be a leader in providing a range of specific goods or services Managing core competencies • Identify existing core competencies • Acquire or build core competencies so that the firm remains world­class and better than the competitors • Extend competencies to find new applications and opportunities for the markets of tomorrow Strategic Alliances Strategic Strategic alliance • A formal relationship created among independent organizations with the purpose of joint pursuit of mutual goals Organizations in strategic alliances: • • • Share administrative authority Form social links Accept joint ownership Organizations form strategic alliances to: • Develop new technologies • Enter new markets Question #1 Question What is a formal relationship created among independent organizations with the purpose of joint pursuit of mutual goals? A.Knowledge organization B.Learning organization C.Strategic alliance D.Wholly­owned subsidiary 9-12 The Learning Organization The An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. How do firms become learning organizations? • Engage in disciplined thinking and attention to details, making decisions based on data and evidence rather than guesswork and assumptions • Search for new knowledgeand ways to apply it • Review successes and failures looking for lessons and deeper understanding • Benchmark­­identify and implement best practices • Share ideas throughout the organization The High-Involvement Organization Organization High­involvement organization • A type of organization in which top management ensures that there is consensus about the direction in which the business is heading Requires a flat, decentralized structure built around a customer, good, or service The organizational leaders seeks input from the top management team and also from lower levels of the organization Organizational Size and Agility Organizational Large organizations are typically less organic and more bureaucratic Jobs tend to become more specialized in large organizations With size comes greater complexity and a need for increased control Still, organizations can find ways to remain agile despite these challenges The Case for Big The Larger size helps create economies of scale Larger size helps develop economies of scope • Economies in which materials and processes employed in one product can be used to make other related products 9-16 The Case for Small The Large organizations can have difficulty managing relationships with customers and among its own units Large organizations are more difficult to coordinate and control Smaller organizations can: • Move fast • Provide quality goods and services to targeted market niches • Inspire greater involvement from their people Being small can avoid diseconomies of scale Being Big and Small Being “Small” unleashes energy and speed but “big” offers market power Downsizing • The planned elimination of positions or jobs Rightsizing • A successful effort to achieve an appropriate size at which the company performs most effectively Survivor’s syndrome • Loss of productivity and moral in employees who remain after a downsizing Customer Relationship Management Management Customer relationship management (CRM) • A multifaceted process focusing on creating two­way exchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns. 9-19 The Value Chain The Value chain The sequence of activities that flow from raw materials to the delivery of a good or service with additional value created at each step Total Quality Management Total Total quality management (TQM) • An integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that result in high­quality goods and services. 9-21 ISO 9000 ISO ISO 9000 is a series of voluntary quality standards by the International Organization for Standardization based on eight principles • • • • • • • • Customer focus Leadership Involvement of people Process approach System approach to management Continual improvement Factual approach to decision making Mutually beneficial supplier relationships Customers and The Responsive Organization Responsive The Value Chain Reengineering Reengineering Reengineering • Revolutionizing key organizational systems and processes to answer the question: “If you were the customer, how would you like us to operate?” Processes are designed from scratch as if the organization was just starting out 3 Types of Technology Configurations (Linda Woodward) Configurations (Linda Small batch technologies • A small batch is a technology that produces goods and services in small volumes • A job shop is a company that utilizes small batch technologies Large batch technologies • A large batch is a technology that produces goods and services in large volumes Continuous process technologies • A process that is highly automated and has a continuous production flow • Continuous process technologies are very high volume producers Organizing for Flexible Manufacturing Manufacturing Mass customization • The production of varied, individually customized products at the low cost of standardized, mass­ produced products. 9-26 Computer-Integrated Manufacturing Manufacturing Computer­integrated manufacturing (CIM) • The use of computer­aided design and computer­aided manufacturing to sequence and optimize a number of production processes. 9-27 Flexible Factories Flexible Flexible factories • Manufacturing plants that have short production runs, are organized around products, and use decentralized scheduling. 9-28 Lean Manufacturing Lean Lean manufacturing • An operation that strives to achieve the highest possible productivity and total quality, cost effectively, by eliminating unnecessary steps in the production process and continually striving for improvement. 9-29 Organizing for Speed: TimeOrganizing Based Competition Time Based strategies aimed at reducing the total time it takes to deliver a good or service Logistics is the movement of the right goods in the right amount to the right place at the right time Just­in­time is a system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed Simultaneous engineering is a design approach in which all relevant functions cooperate jointly and continually Question #2 Question ___________ is the movement of the right goods in the right amount to the right place at the right time. A.Logistics B.Supply chain management C.Value chain analysis D.Customer Service 9-31 Customers and the Responsive Organization Organization The point of structuring a responsive, agile organization lies in enabling it to meet and exceed the expectations of its customers Managers must stay focused in three key ingredients­­the strategic triangle The company itself Competition The customer The Strategy Triangle The ...
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