Lecture 6: Organizational structure, determinants and change mechanisms of organizational culture Flashcards
(60 cards)
1
Q
Organizational structure
A
refers to the arrangement and relationship of different parts within an organization. It encompasses both formal and informal aspects. Formal structure: The official, explicit division of responsibilities, job definitions, rules, and reporting relationships. It prescribes “who does what, how, when, and where.”
Informal Structure: Unofficial norms, social expectations, and emergent relations that influence behavior but are not codified.
2
Q
Structural duality
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The dynamic interaction where structures shape individual practices, and individuals’ behaviors simultaneously reproduce and modify structures over time. can be likened to buildings except organizations change over time. Structure is crucial because it directs behavior, enables organizational coordination, and affects both individual and organizational outcomes.
3
Q
What is the difference between craft form and bureaucracy?
A
- Craft Form: Economic production was small-scale, often family-based, with workers controlling tools and decisions.
- Bureaucracy: Emerged in the early twentieth century as organizations grew larger and more complex. It enabled large-scale production and wielded significant social influence.
4
Q
What is Max Weber’s ideal type of bureaucracy?
A
- Weber analyzed bureaucracy as a defining organizational form of modern societies and identified key characteristics:
- Clearly Defined Division of Labor: Specific tasks assigned to individuals or subunits.
- Hierarchy of Authority: Decisions by lower levels are subject to review by higher levels.
- Written Rules and Documents: To ensure consistency and standardized procedures.
- Separation of Home and Office: Distinction between organizational and personal resources and roles.
- Appointment Based on Qualifications: Merit-based staffing, not personal ties.
- Weber also identified societal preconditions for bureaucracy including urbanization, literacy, monetary economy, and government expansion.
5
Q
What are other managerial theories?
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- Scientific Management (Frederick Taylor): Emphasized scientific studies to find the most efficient ways to perform tasks.
- Managerial Principles: Key organizational principles such as divisionalization (grouping by tasks or outputs), scalar principle (clear hierarchy), and exception principle (delegation of routine decisions).
6
Q
What is Joan Woodward’s empirical challenge?
A
- Found no universal “one best” structure.
- Identified three types of production technologies influencing structure:
- Small-batch (customized)
- Large-batch (mass production)
- Process (continuous production)
- Structure effectiveness depends on fitting the type of production technology, laying the groundwork for contingency theory
7
Q
Complexity
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The extent and variety of differentiation within an organization.
8
Q
Horizontal complexity
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Number and variety of job types, departments, or occupational specialties. Reflects specialization.
Two conceptualizations:
- Taylorist approach: Narrow task specialization, task routinization.
- Professional approach: Variety and depth of specialized knowledge and training.
- Measured by counting job titles, departments, or occupational specialties.
9
Q
Vertical complexity
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Number of supervisory levels between top management and frontline employees.
Often measured by the number of hierarchical layers.
Closely related to centralization (distribution of decision-making power).
10
Q
Spatial complexity
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Number and spread of organizational locations or sites.
Can involve horizontally or vertically differentiated activities across locations.
Enables expansion, adaptation to local environments, and access to diverse labor markets.
11
Q
What are the consequences of complexity?
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-Advantages: Efficiency through specialization, innovation, adaptability, and growth opportunities.
- Disadvantages: Coordination and control difficulties, increased conflict, potential for corporate crimes due to management challenges in complex, decentralized subunits.
- Covariation: forms of complexity increase together as organizations grow, but can vary independently depending on the organization’s nature
12
Q
Formalization
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The degree to which rules, procedures, and tasks are codified and written down. Measured using: - Job Codification: Number and specificity of rules governing job tasks.
- Rule Observation: Extent to which rules are actually followed by organizational members.
- Measures include self-reports of rule adherence and objective counts of written rules/documents.
13
Q
What are the organizational consequences of formalization?
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- Positive:
- Ensures predictable, consistent outcomes.
- Facilitates training and equity in treatment (e.g., merit-based hiring).
- Reduces variability in performance.
- Negative:
- Can create rigidity and reduce flexibility.
- May inhibit innovation and responsiveness to unforeseen problems.
- Can foster bureaucratic personality traits (timidity, conservatism).
- Potential for “working to rule” as a form of protest.
14
Q
What is professionalization?
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- Professionalization can serve as an alternative or complement to formalization for organizing behavior.
- Relationship between professionalization and formalization tends to be inverse: more professionalized occupations experience less organizational procedural control.
- Organizations may align degrees of formalization with professional levels of members for optimal control.
15
Q
Centralization
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Distribution of decision-making authority within the organization. - Measurement challenges arise due to multiple levels of decision-making and rule-based delegation.
- Methods include:
- Ratios of managers to nonsupervisory staff.
- Number of hierarchical levels.
- Surveys measuring perceived influence on decisions (e.g., Tannenbaum’s control graphs).
Can be direct decision-making authority or indirect control through evaluation, resource allocation and deadlines
16
Q
Participative management vs management by participation
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- Participative Management: Workers take part in decision-making but do not control management.
- Management by Participation/Self-Management: Workers actually control management functions.
- True power equalization is rare; hierarchy is typical in all but the simplest organizations.
17
Q
Consequences of centralization
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- Advantages:
- Improved coordination.
- Faster decision-making when fewer people are involved.
- Disadvantages:
- Risk of poor decisions when top management lacks detailed information.
- Communication challenges between levels.
- Negative effects on worker attitudes and commitment due to lack of control.
- Societal Implications:
- Degree of centralization reflects societal values about authority and democracy.
- Organizational centralization may mirror and influence broader political culture.
18
Q
What are the relations among complexity, formalization and centralization?
A
- Generally, as complexity increases, so does formalization to coordinate diverse activities efficiently.
- Complexity tends to be negatively related to centralization because complex organizations require delegation for timely and informed decision-making.
- Formalization can coexist with either high or low centralization, especially in professionalized contexts.
- Formalized procedures may enable decentralization by ensuring control over delegated decisions.
19
Q
What is Burns and Stalker’s Mechanistic vs Organic forms?
A
- Mechanistic:
- High horizontal complexity.
- High formalization.
- High centralization.
- Clear hierarchy and top-down control.
- Suited for stable environments.
- Organic:
- Networked control rather than hierarchy.
- Flexible, low specialization.
- Low formalization and centralization.
- Adapted to dynamic, changing environments.
20
Q
High performance work systems
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- Contemporary variant of organic forms.
- Characterized by broadly defined jobs, teamwork, collective decision-making, and worker participation.
- Posited to enhance motivation, flexibility, and competitiveness.
21
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What is organizational structure variation?
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- Organizational structure determines the movement and activities within an organization, much like how a building’s design influences the behavior of its occupants.
- Structures vary depending on size, technology, environment, and choices reflecting organizational values and ideologies.
- Structures can be copied from other organizations or influenced by popular fads and can be restructured over time.
- The chapter emphasizes the complexity of factors influencing structure and the need to consider multiple explanations in combination.
22
Q
Closed systems approach
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- Focuses on internal characteristics of the organization (e.g., size, technology) influencing structure.
- Rooted in structural-functionalist theory, dominant after WWII, emphasizing efficiency and internal coordination.
- Practical because internal arrangements are easier to change than external factors.
23
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Open systems approach
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- Emphasizes external environmental influences such as customers, suppliers, competitors, and regulatory agencies.
- Includes institutional theory, which stresses social norms and pressures external to the organization.
24
Q
What happens when organizations grow?
A
- Specialization increases (greater complexity) because more personnel allow division of labor.
- Problems of communication and coordination increase, leading to more formalization (rules, procedures).
- Decision-making becomes more complex, prompting decentralization (delegation of authority).
- Positive relationships between size and complexity
- Larger organizations have higher formalization and lower centralization, but can be moderated by professionalization
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How is the relationship between size and centralization multifaceted?
- Larger size increases managerial responsibilities (pressure to delegate).
- Larger size also increases importance of managerial decisions (pressure to centralize).
- Expertise level mediates delegation risks; professionals expect more autonomy.
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Problems in research on size and structure
- Mixed findings on relationships between size and formalization/centralization.
- Causality is debated: Does size cause structure, or does structure influence size requirements?
- Size can be conceptualized as: physical capacity, personnel count (most common), inputs/outputs (clients served, sales volume), discretionary resources (capital, endowments)
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Role of technology in contingency theory?
- Small-batch technology: small quantities, non-standardized goods.
- Large-batch technology: mass production of standardized goods.
- Continuous technology: large-scale production of nondiscrete goods (e.g., chemicals).
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Thompson's interdependence typology
1. Pooled interdependence (mediating technology): workers act relatively independently but share resources.
2. Sequential interdependence (long-linked technology): work activities occur in a predictable, ordered sequence.
3. Reciprocal interdependence (intensive technology): activities require mutual adjustments, less predictable.
Implications: - Pooled interdependence → low complexity, moderate formalization, moderate decentralization.
- Sequential interdependence → higher complexity, high formalization and centralization.
- Reciprocal interdependence → moderate complexity, low formalization and centralization.
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Technological uncertainty dimensions
- Variability of inputs (e.g., human inputs like patients vs. uniform inputs like steel).
- Knowledge of means-end relations (how well cause-effect in production is understood).
- Organizations with high uncertainty tend to have lower formalization and centralization
- Research supports that routinized (low uncertainty) technologies correlate with higher formalization and centralization.
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How does professionalization affect centralization?
more professionals → desire for less routinized work and more decision-making autonomy → less centralization.
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What are the combined effects of size and technology?
- Technology impacts structure more in smaller organizations
- In larger organizations, technology's effects are confined mostly to workflow-related jobs.
- Debate exists whether size or technology is more critical; evidence suggests both operate together.
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Functional form
- Groups based on specialized skills and knowledge (e.g., R&D, manufacturing, marketing).
- Advantages:
- Economies of scale.
- Specialization within functions.
- Disadvantages:
- Difficult to coordinate across functions.
- Members primarily identify with their functional unit.
- Best suited for smaller organizations or those with a single product line and stable technology/markets.
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Product form
- Divisions organized around product lines (e.g., cereals, cookies, frozen entrées).
- Each product group has its own functional units.
- Advantages:
- Easier coordination within product lines.
- Better adaptation to product-specific changes.
- Disadvantages:
- Duplication of functions reduces economies of scale.
- Suited for larger organizations with multiple product lines and dynamic markets.
34
Matrix form
- Combines functional and product forms.
- Employees report to two managers: functional head and product/project manager.
- Developed in aerospace industry to handle complex projects requiring expertise from multiple functions.
- Advantages:
- Balances specialization and product focus.
- Disadvantages:
- Complex dual-authority can create conflict and stress.
- Best for smaller organizations with limited product lines.
35
What are the effects of internal culture on structure?
- Internal culture is a closed-systems influence on structure.
- Defined as shared assumptions, values, beliefs, norms, and behaviours that form a backdrop for action
- Culture affects:
- Need for coordination and control.
- Acceptability of formal structures.
- Professional socialization fosters shared culture, making decentralized structures more feasible.
- Culture is relatively stable and resistant to change, making it a less flexible management tool.
36
What is institutional theory?
- It posits that formal structures become institutionalized—adopted as normative, "right and proper" regardless of efficiency.
- Organizations conform to maintain legitimacy and face social pressures.
- Institutional pressures include:
1. Coercive: legal mandates, government regulations (e.g., affirmative action offices).
2. Mimetic: imitation of other successful organizations.
3. Normative: influence of professional and trade associations promoting norms.
- Institutionalization leads to adoption of specific structural elements (e.g., grievance procedures) that may not always fit functional needs.
- Structures may be inconsistent due to conflicting norms from different constituencies.
37
What are the cross-cultural variations in structure?
- National cultures shape organizational structure through shared norms about appropriate structures.
- Examples:
- Nordic countries, US, and Canada show different levels of formalization and centralization.
- Japanese firms in the US retain Japanese organizational models emphasizing lifetime employment, consensual decision-making, and informal control
- Debate exists between:
- Culture-free view: structural differences reflect size, technology, not culture.
- **Culture-bound view**: national culture is the dominant influence.
- Empirical findings support both views; culture likely interacts with material factors.
- Cultural influences may affect authority patterns and legitimation more than operational aspects.
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What is the debate around culture?
- Culture-free view: structural differences reflect size, technology, not culture.
- Culture-bound view: national culture is the dominant influence.
- Empirical findings support both views; culture likely interacts with material factors.
- Cultural influences may affect authority patterns and legitimation more than operational aspects.
39
Strategic choice vs determinism
- Traditional contingency views assume decision-makers choose the best structure for efficiency.
- Critics argue decision-makers have limited discretion; external conditions and internal politics constrain choices.
- Power dynamics, personal interests, and organizational politics can shape structure.
40
Bounded rationality debate
- Decision-makers cannot always make fully rational, optimal choices due to limited information and cognitive capacity.
- Institutional theory sometimes critiques decision-makers as "cultural dopes," following norms without independent calculation.
- Economic theories assume more complex and rational decision processes.
41
How is culture a group characteristic?
- Culture is fundamentally a characteristic of a group, analogous to how personality and character are characteristics of individuals.
- Understanding culture requires understanding group dynamics theories and models.
- Founders and leaders influence the culture through their handling of group dynamics, even if unaware of the underlying processes
42
Forming
- Groups form around a purpose (learning, task performance, crisis).
- New members face key questions:
- **Identity and Role:** “Who am I in this group?”
- **Authority and Influence:** “Who controls whom? Will my influence needs be met?”
- **Intimacy:** “How will I relate to members and at what level?”
- These issues preoccupy members regardless of group structure.
- The **convener's approach and style** heavily influence how these issues evolve.
43
Storming
- Members test each other, especially around authority and influence.
- Confrontations occur with the convener or emergent leaders.
- Attempts to "bury" issues by strong chairmanship or procedural rules (e.g., Robert’s Rules) push conflicts into task disagreements.
- Giving a new group a task too early is unwise; identity issues dominate.
- Founders and conveners influence this stage by their personal style and formal systems.
- Observers should focus on group reactions to challenges: ignore, fight, accept, or waffle.
- Conflicts are resolved when some members recognize and name the fighting process.
- A consensus emerges on leadership and decision-making, often with relief and optimism.
- However, competition and time pressure reveal status systems and differential contribution
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Norming
- Recognition of implicit group dynamics surfaces through explicit naming.
- Members may question participation equality or leadership suitability depending on task needs.
- Distinguishing between Level 1 (task-focused) and Level 2 (personal relationships) becomes crucial.
- Leaders help by acknowledging diversity in talents and needs.
- The illusion of “everyone liking each other” gives way to realistic acceptance and appreciation.
- This stage sets the foundation for the next: performing
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Performing
- Only after earlier stages can the group focus fully on the task.
- Many groups get stuck in earlier stages, unable to shift focus from internal issues to task.
- Leaders must ensure consensus on:
- The task itself
- Problem-solving methods
- Decision processes
- Progress assessment mechanisms
- Understanding these stages helps analyze how founders create culture
46
What is the role of the founder in culture creation?
Influence culture by imposing their assumptions, like about the nature of the world, organizations' roles, human nature and relationship, truth, management of time and space. They have well-articulated theories about group functioning. Groups embody the founders vision by creating a culture. Founding acts are within existing macro cultures, which influence what changes are possible.
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What are the implications for founders and leaders?
- Founders imprint their beliefs, values, assumptions, and behavioral rules on organizations.
- Success leads to these becoming taken-for-granted cultural elements
- Founders may be unaware but their structures and processes manage group dynamics of identity, authority, and intimacy.
- Founders must ensure new ideas fit existing macro cultural needs.
- Founders’ behavior is highly visible and influences group functioning.
- Groups must pass through developmental stages before full task focus is possible
48
What are the fundamental problems of groups?
1. External Adaptation: Organizing to deal with the environment (survival).
2. Internal Integration: Organizing to handle human problems within the group.
- Culture emerges from how these problems are solved.
- Also known as "task and group maintenance," "strategy and mission vs. structure and process," or "double bottom line."
- These are socio-technical systems, where external and internal issues intertwine
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External adaptation components
1. Mission: Shared understanding of core mission, primary task, manifest and latent functions.
2. Goals: Consensus on goals derived from mission.
3. Means: Consensus on means to achieve goals (structure, division of labor, reward and authority systems).
4. Measurement: Agreement on criteria and systems for assessing performance.
5. Correcting and Repairing: Consensus on remedial actions when goals are unmet
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Internal integration components
1. **Language:** Common language and conceptual categories.
2. **Identity and Boundaries:** Defining who is in/out and criteria for inclusion.
3. **Authority:** Consensus on power, authority, and status distribution.
4. **Trust and Openness:** Norms of interpersonal relating.
5. **Rewards and Punishments:** Defining allocation.
6. **The Unexplainable:** Concepts to explain phenomena beyond rational explanation
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What is the role of language and categories of thought?
- A common language is necessary but not sufficient; shared meanings of terms in the organization’s vision are critical.
- Founders often create jargon or acronyms that newcomers must learn.
- Misunderstandings can arise when context is missing
52
What is the role of a core mission?
- Every organization must develop a shared **core mission** reflecting a balancing of stakeholders’ needs:
- Investors, suppliers, employees, community, customers.
- Organizations have **manifest functions** (publicly stated) and **latent functions** (taken-for-granted, implicit).
- Example: Universities have manifest (education) and latent functions (sorting students, professional autonomy).
- Latent functions often resist change and influence strategy implicitly.
- Mission is linked to **identity** and brand, fostering employee commitment
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Issues around goals
- Consensus on mission does not guarantee agreement on operational goals.
- Goals specify concrete actions and resource allocations.
- Goals reveal subculture disagreements (e.g., different marketing definitions at DEC).
- Goals vary by timeframe: short-term, medium-term, long-term.
- Clear goal consensus makes assumptions about goals cultural elements
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Issues around structure, systems and processes
- Founders impose structures and processes—if successful, these become cultural elements.
- Groups tend to default to familiar organizational structures.
- These agreements determine task division, authority, rewards, and communication.
- Skills and knowledge to cope with the environment become cultural if consensus exists (e.g., flute craftsmanship).
- Division of labor influences power and status structures.
- Founders’ backgrounds influence dominant functions (engineers vs. marketers).
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Issues around measurement
- Consensus needed on what, how, and when to measure performance.
- Measurement is linked to goals and feedback.
- Measurement systems become cultural artifacts and influence employee focus.
- Different subunits may have conflicting measurement preferences.
- Quantitative measurement is preferred in management but may distort reality (e.g., Exxon’s "ultimate potential" ranking).
- Social norms can override technical measurement logic.
- Measurement systems impact morale and organizational culture
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Correction and repair strategies
Organizations must agree on how to detect problems, diagnose causes, and implement remedies.
- Crisis responses reveal deep cultural assumptions.
- Managing change involves moving beyond fixing to **changing and improving**, a complex and contested process
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How to define group boundaries and inclusion criteria?
- Hiring and membership status create insider/outsider distinctions with symbolic and practical consequences.
- Career movement includes lateral, vertical, and inclusionary dimensions.
- Group secrets and rituals reinforce identity and status.
- Boundary roles increase with organizational complexity.
- Macro cultures influence assumptions about employer-employee relationships (e.g., temporary vs. permanent).
- Defining inclusion is key to cultural analysis
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How to distribute power, authority and status?
- Founders shape power and authority by resource allocation and division of labor.
- Technology and knowledge domains affect status hierarchies.
- Authority norms govern aggression and influence.
- Social rules (manners, politeness) protect face and self-esteem.
- Performance appraisals can violate social norms, causing resistance.
- Psychological safety is crucial for subordinates to speak up; varies by macro culture.
- Leaders must create environments encouraging openness despite cultural differences
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Levels of intimacy
- Level 1: Transactional (strangers, professional distance)
- Level 2: Personal (friendships, trust, openness)
- Level 3: Intimate (close friends, lovers)
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How to develop norms?
- Work relationships vary in intimacy level based on task interdependency.
- Multicultural groups face challenges reconciling different norms (e.g., immediate task focus vs. relationship building).
- Leaders must facilitate understanding and acceptance of diverse relational norms
