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P art 5 r eorganizing the w orkplace what major

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P ART 5: R EORGANIZING THE W ORKPLACE WHAT MAJOR FORCES SHAPE AN ORGANIZATION’S STRUCTURE? S TRUCTURAL O PTION : Strategy Innovation Strategy Organic (flexibility) Loose structure; Low specialization; Low formalization; Decentralized = strategy that emphasizes intro of major new products & services - for meaningful & unique innovations Cost- Minimization Strategy Mechanistic (stable & efficient) Tight control; Extensive work spc’n; High formalization; High centralization = …emphasizes tight cost controls, avoidance of unnecessary innovation / marketing expenses, price cutting e.g. Wal-Mart, grocery sellers Imitation Strategy Mechanistic & Organic Mix of loose w/ tight properties; Tight controls, low costs in current activities & looser controls for new undertakings = strategy of moving into new products/markets only after their viability has already been proven - both innovation + cost-min (previous 2) - minimize risk, max. opportunity for profit take successful ideas of innovators, copy them e.g. manufacturers of mass-marketed fashion goods that are rip-offs of designer styles e.g. IBM (follow competitors only after they’ve demonstrated that the market is there) Organizational Size - large org’s tend to have more specialization, departmentalization, vertical levels, rules & regulations (more mechanistic) - BUT relationship isn’t linear; size affects structure @ decreasing rate e.g. adding 500 to 2000, no impact b/c already fairly mechanistic (but adding to 300 results in shift toward more mechanistic) Technology = the way in which an org transfers its inputs into outputs - every org has at least 1 tech for converting financial, human, and physical resources into products or services Degree of routineness : tendency of tech toward either routine(automated, standardized operations; e.g. assembly line ) or non-routine(customized; e.g. genetic research ) activities - routine tasks are associated w/ taller, more departmentalized structures - tech-centralization relationship: moderated by degree of formalization *If low formalization (min. of rules/regulations) → routine tech + centralized structure
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P ART 5: R EORGANIZING THE W ORKPLACE *If high formalization → routine tech + decentralization - non-routine tech rely more on knowledge of specialists Environment = institutions/forces outside the org that potentially affect the org’s performance (and uncertainty associated w the forces) - suppliers, competitors, customers, gov’t regulatory agencies, public pressure groups - Static environment (e.g. no new competition, no new tech breakthroughs) VS. Dynamic (e.g. changing gov’t regulations affecting business, new competitors, changing preferences by customers) → more environmental uncertainty 3 DIMENSIONS OF ENVIRONMENTAL UNCERTAINTY Capacity = degree to which the environment can support growth - rich/growing environments generate excess resources for org when there’s scarcity - abundant capacity leaves room for org to make mistakes (scarce capacity does not) Volatility = degree of instability (predictable change) in an environment -
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