Organisation and Information Management Flashcards
(70 cards)
1
Q
Definition: organisation (by Pride - not preferred by Baisch)
A
a group of two or more people working together to achieve a common set of goals
2
Q
Definition: organisation (by Jones - preferred by Baisch
A
a tool used by people to coordinate their actions to obtain something they desire or value – that is, to achieve their goals. People who value security create an organisation called a police force, an army, or a bank.
3
Q
Why do we organise?
A
- Increase quality – by specialisation
- Reduce cost – by reducing transaction costs and by generating economies of scale
- Prevent fraud – by better control of power (compliance)
- Increase speed – by faster processes
- d
4
Q
Explain the organisational principle of congruence
A
The following should be congruent:
- Task / job
- Responsibility
- Power/authority
Avoid:
- Suicide squad: high task/job, high responsibility, low power
- Land of milk and honey: high task/job, high power, low responsibility
- Jumping Jack Director: High power/authority, low task, low responsibility
- d
5
Q
What defines a job/task
A
FOPMTL
- Function – what to do?
- Object – on what do we work?
- Person – who does it?
- Means, tools – with what?
- Time – when?
- Location – where?
6
Q
What are the two kinds of competencies needed to fulfil a task?
A
Operational competence
Leaders competence
7
Q
What is operational competence?
A
PAAD
- permission to do something
- being available (Verfügungskompetenz)
- to ask for
- to decide
8
Q
What is leaders competence
A
Authority to:
- give directives
- set compliance rules
- monitor and check
- d
9
Q
Define Responsibility
A
RACI Method:
Responsible – for the doing
Accountable – for getting the permission
Consulted – to be involved
Informed – to hand over information
Two concepts:
- Own up to your actions – I did it
- Take responsibility for the consequences
10
Q
Definition: functional structure (organisational structure)
A
DBEER
A design that groups people together on the basis of their common expertise and experience or because they use the same resources.
E.g. CEO
Then: materials management, manufacturing, sales and marketing
11
Q
Functional structure:
Where is this typical?
What are it’s characteristics
A
Where typical: small to medium sized business
Characteristics
- Based on scope of one’s duties. Focus on competence and performance
- One-line design – only 1 boss for everybody.
12
Q
From where does the functional structure of an organisation derive?
A
Oldest organisational design in industry: derives from the split in technical or commercial focus of the founders of a company.
13
Q
6 Advantages of a functional structure
A
TOSCRS PL
- CEO in touch with all operations (good information transparency)
- Simplifies control mechanisms
- Clear definition of responsibilities (due to 1-line structure)
- Specialists at senior and middle management levels (deliver high quality because they are experts in their field)
- High productivity in each single function (but overall customer to customer…not?)
- Deep learning for skills might form core competencies
14
Q
Functional structure:
6 Disadvantages
A
Don’ scam
- Difficult to cope with diversity (especially product / market diversity)
- Senior managers overburdened with routine matters => bottle necks
- Senior managers neglect strategic issues (too far away from markets)
- Coordination between functions difficult (many interfaces in order fulfilment – slow cycle times)
- Failure to adapt (no market drive in most of the functions)
- Difficult to measure the contribution to company’s overall profitability
15
Q
Divisional structure: what is this
A
Head office (central services to the side) Then: Division 1, 2, 3...(like companies within a company, e.g. Daimler trucks)
16
Q
Divisional structure:
Where
Characteristics
History
A
Where: big, diversified companies
Characteristics:
- One-line design: 1 boss for everybody
- Focus on products and markets/customers
History: 2nd half of 20th century
17
Q
Divisional structure:
Advantages
A
FCCSSD
- High flexibility (good for M and As): invest or de-invest in product groups = divisions.
- Better control by unit’s performance for each unit possible: like a company with margin/profit line: Profit Centres
- Better contribution to company strategy (through market contact, sees customer and competitor perspectives)
- Specialisation in products helps to develop core competencies
- Development of division managers: so able to manage whole company if promoted.
18
Q
Divisional structure:
Disadvantages
A
ErEcsEcELs
- Expensive redundancy in resources that are installed in each division (HR, Mgmt team, purchasing…)
- Expensive central services to coordinate the divisional functions (e.g. finding synergies…)
- Expensive Bureaucratic cost and transaction cost
- Egoism of the divisions or the attempt of the central services to dominate the decisions may paralyse the organisation.
- Losing synergies in…purchasing, HR…
19
Q
Matrix structure: what is it
A
Line 1: CEO
Line 2: Functional structures: VP Purchasing, VP Manufacturing, VP Sales and marketing
Other side of level 3, to the left of the line structure: Product managers, Divisions, Process managers, Project managers…
E.g. Daimler is multi-dimensional
20
Q
Matrix structure: Focus
A
Object and performance
21
Q
Matrix structure: Advantages
A
CEFICQIK
- Reduce functional barriers by communication between functions, stimulated by product managers
- Overcome egoism in divisions
- Make the (high-tech) organisation more flexible and able to respond quickly
- Improve cost and quality at the same time (functions for high quality, product managers for speed and cost)
- Integrate knowledge: the two lines and teams are more open to learning
22
Q
Matrix structure: Disadvantages
A
Suc-Fruc
- The decisions become slow (discussion between 2 dimensions)
- Unclear job and task responsibilities (e.g. finding synergies…)
- High degree of conflicts, high transaction costs
- Cost and resource allocation becomes fuzzy
- Lack of rules and Standard Operating Procedures (SOP) leads to uncertainty
- Tendency to more centralisation to get more authority and control.
23
Q
Agency theory history
A
1973, Ross ‘Theory of Agency’
24
Q
Agency theory assumptions
A
- Individuals maximise their personal benefit
- Information asymmetry between principal and agent; agent generally knows more in their area of expertise (so inflate the costs, don’t pass on bad performance information…)
• Different interests
/ incentives / preferences: conflict in objectives; profit v maintain collegiate relationships, finish early…
• Assume people are naturally bad: malice, fraud, opportunistic behaviour.
25
Agency theory: main idea
An organisation is a network of contracts.
26
Examples of Agency theory relationships
Principal - Agent
Employer - Employee
Customer - Seller
Board - CEO
27
What are agency costs, and what is the goal?
Agency costs are:
1. principal control costs (avoid fraud)
2. warranty costs incurred by agent (to be selected)
3. welfare costs (costs of negative effects)
Principle: Principal control costs and warranty costs should not be larger than the potential welfare costs that may have otherwise been incurred.
28
Describe agency theory issues before the contract is signed, and strategies to deal with them
Problem: Adverse Selection (risk of hidden information – agent knows their abilities and achievements best)
* Signaling (agent shows they have skills and will work hard) - e.g. Request degree certificates, assessment centre…
* Screening - e.g. Review CVs data carefully
* Self-selection (only the goods ones will accept it) - e.g. Request Recommendation
* Alignment of interest (consequences of fraud…) - e.g. Right to cancel contract due to…
29
What are two agency theory issues that occur after signing the contract?
Moral Hazard (risk hidden action, conflicting interests – agent’s efforts are difficult to observe/judge)
Hold-up (risk hidden intention, not abiding by the contract)
30
What are strategies for dealing with moral hazard?
1. Design contracts to prevent “hidden information” and “hidden action” and stimulate an expected behaviour:
a. monitoring – level should correlate to level of incentives being offered to the agent. E.g. Performance measures, reports, 360˚ feedback
b. aligning interests (through incentives) – performance bonuses: the more compensation varies with effort, the better. Compensation for an activity should match the value a principle puts on the completion of that activity.
2. New structures / organisational arrangements to generate transparency (monitoring) - e.g. regulatory board, steering committee…
31
What are strategies for dealing with hold up?
Alignment of interest (contract clauses) - e.g. stating in contract a Take/Pay clause
32
Criticism of agency theory
1. Focus is on the individual person: the state is not included (regulation…)
2. Assumption of ability to anticipate future problems through contract design
3. No empirical basis.
4. Bosch: no longer gives bonus payments for achieving individual goals – should help the company as a whole to achieve its goals (team!)
33
Why process management?
1. Mistakes and lack of speed depresses customers.
a. Problem: passing the buck – I did my bit right.
b. Solutions: Everyone is responsible for customer satisfaction, not just their own job => KPI involving customer satisfaction so they care, team development activities, bringing down the walls, social activities with each other.
2. Spaghetti processes in traditional companies lead to:
a. Long delivery times
b. Defects and mistakes (don’t know where from)
c. Double work
d. High process costs (problems at all the interfaces)
34
Porter's Value Chain Analysis - what did it do, when?
It brought a new perspective into management science: the sequence/flow of activities - or process.
1980s
35
Draw the Porter's Value chain analysis
Secondary activities (ICH-TDP):
- Infrastructure of the Company
- Human Resources
- Technology Development
- Procurement
```
Primary activities (IOMOS):
Inbound logistics => Operations => Marketing and sales => Outbound logistics => Service
```
Right-hand side: Margin
36
Definition: Process
A sequence of activities that transforms an input in a defined output
37
Name and explain the three types of processes
Management processes - help control and manage the company (budget, strategy)
Core processes - generate direct value, influence customer satisfaction and are crucial in competition
Support processes - help the core processes (HR, IT)
38
What is the risk of having processes for everything
Spend much money documenting processes nobody works with. Some experts state it is common to identify 1300 to 1500 processes in midsized companies, of which 10% are relevant for its day to day business.
39
How does culture constrain a company?
Structure may need to follow culture.
Highly qualified employees prefer more self-organisation
A patriarchal cultural leads to more centralisation
Modern organisations from high tech industry prefer matrix structures or a vast number of secondary structural options: High-tech = High-org
40
What are organisational targets
They sit under company targets.
Divided into 2 aspects:
1. Instrumental-rational aspects:
i. Formal business targets
ii. Being effective (do the right things) and efficient (do things right)
iii. Best input-output relation
2. Socio-emotional aspect
i. Security (of job) and autonomy / independence
ii. Human targets of the employees: personal development, being part of something, belonging (identity), work-life balance, achieve something good.
41
What is SCRUM?
* An agile project management method.
* Short sprints (e.g. 1-2 weeks) to get software modules ready to run. Daily SCRUM meetings.
* Steps: detailed planning (for sprint only), programming, testing, customer testing.
42
What is different about SCRUM?
* Less forward planning
* More customer feedback and scope to influence.
* Get a useable product faster – important when technology changes so fast.
* Before: Built to customer specifications from the beginning, little scope for feedback. Too slow to complete, difficult to change at the end. Waterfall Model – idea is you cannot jump steps.
43
What are the three levels of change using the iceberg model
Visible:
1. Level of facts: content
Invisible:
2. Level of context/constrains: structure and social area
3. Level of behaviour: behaviour and culture
44
What does the level of facts include (3 levels of change)
Level of facts (visible): content - includes tasks, project plan, work packages, targets, org charts...
= what we can see, read, measure and talk about with everyone.
45
What does the level of context/constrains include (3 levels of change)?
Level of context / constraints is invisible, but is sometimes able to be changed.
Elements = Structure and social area
Social area = individual opinions, competences, relationships, resentments, competition, cooperation, friendship
46
What does the level of behaviour include (3 levels of change)?
Level of behaviour is invisible.
Elements: behaviour and culture.
* behaviour – includes tactics, micro-politics, influence, power structures
* culture – includes rules, values, purpose, paradigms.
47
What do the three levels of change tell us?
It is always a trade-off with the 3 dimensions for a good solution.
Level of facts solution:
- reduce cost by 10%
Solution considering the context: acceptance/feasibility
Solution that changes behaviour: new behaviour shown in a stable way.
48
What is the danger of hidden targets?
At the end it destroys trust.
E.g. reducing headcount (and hiding this), testing the competence of managers, closing a factory...
49
Definition of change management
Includes planning implementing, controlling and stabilisation of new strategies, processes, organisation and culture with the intention to maximise affectivity and efficiency of change.
50
Name 5 change management strategies
(PIMPE)
1. Change by power
2. Change by information and illustration
3. Change by majorities based on interests
4. Change by participation
5. Change by enabling learning
51
How do you pick between the strategies?
Depends on the company, its culture and your power.
e. g. Daimler picks
1. Power
2. Participation.
If you’ve been there for 10 years, it’s hard to get them moving and participating => use power first to get them moving.
52
Change by power
Provide the mechanism of change
Provide the idea of man / paradigm behind it.
Mechanism of change:
Force people to do new things (boss says so, new law…)
Idea of man:
Two kinds of human beings: rulers/folk. The instable, shilly-shally folk needs a strong leader.
NB: dangerous if you need acceptance.
53
Change by information and illustration
Provide the mechanism of change
Provide the idea of man / paradigm behind it.
Mechanism of change:
Persuade people with arguments
Idea of man:
Homo Oeconomicus: Human beings are rational. They only need enlightenment (information and good arguments). WHY???
54
Change by majorities based on interests
Provide the mechanism of change
Provide the idea of man / paradigm behind it.
Mechanism of change:
Organise majorities by bargaining interests and forming networks
Idea of man:
Everybody has their own interests. I have to form a strong coalition with my interests to have a majority when it comes to decisions. Networks.
55
Change by enabling learning
Provide the mechanism of change
Provide the idea of man / paradigm behind it.
Mechanism of change:
People embrace new things. They want to learn. We offer possibilities.
Idea of man:
People are always willing to learn. We only have to give them the opportunity to learn.
NB: but is it what the organisation wants them to learn?
56
Change by participation
Provide the mechanism of change
Provide the idea of man / paradigm behind it.
Mechanism of change:
People buy in and share responsibilities
Idea of man:
Human beings are social creatures. People want to socialise. If they are part of a group, they will not be against that group.
(more participation => more acceptance)
57
Decribe Kotter's 8-step change model
Unfreeze:
1. Create a sense of urgency
Moving:
2. Establish a powerful guiding coalition
3. Develop a clear shared vision
4. Communicate the vision
5. Empower people to act on the vision. Remove obstacles. (If people are against it, make them believe it or kick them out).
6. Create and communicate short term wins (otherwise it will lose urgency and momentum)
7. Don’t declare victory too early
Refreeze
8. Anchor the changes in corporate culture
58
What are the change management implementation instruments?
1. Information: I know => newspaper, CEO letter/blog, kick-off-meeting, homepage, intranet
2. Qualification: I can => Training (on and off the job, near the job learning factory), visitations, travelling.
3. Motivation: I want => Funds, praise, rankings, challenges, new job opportunities, career
4. Organisation: I am allowed => Giving the authority – organisation handbook…
59
Behavioural phase model according to Kurt Lewin
1. Unfreezing (convince of need to change, get them out of their rut)
2. Moving (change) - will decrease company performance in the short run due to insecurity.
3. Freezing (stability) - should have higher company performance now.
60
Linear phase model for transformation (time based)
Phase 1: Prepare company for transformation - vision - 3-4 months
Phase 2: Work out solutions: 1-2 years
Phase 3: Stabilise and improve - no time constraints.
61
Sketch a masterplan for planning change
Left side:
Level of facts
Level of context/constraints
Level of behaviour (sub-categories: Qualification, information, motivation, organisation)
Bottom (Kotter)
Urgency - powerful guiding coalition - develop clear shared vision - communicate the vision - empower/remove obstacles - short term wins - don't declare victory too early - anchor into corporate culture
Middle: diamonds and bars
62
Ideas for level of facts
Visualise the process
Strategy workshop
Process analysis
Process redesign
Process implementation
63
Ideas for level of context
Develop new org structure, team building activities
64
Ideas for level of behaviour
Qualification: training, foster new thinking
Information: Discuss plan with staff, info at employee meeting, infos on implementation to employees, kick-off new structure, press release
Motivation: Develop new career paths, develop new professional standards
Organisation: Delegate new responsibilities, recruit process manager
65
What is organisation about?
Organisation is about structures of social systems. Rules, contracts assign resources to tasks to fulfill the objectives (plus add punishment and control).
66
What are the critera/objectives of organisation
achieve goals, effectiveness (doing the right things) and efficiency (doing things right)
67
What are the tools of organisation management?
rules, contracts between employees and company, guidelines
Leadership
68
What are the constraints of organisation management
culture, time, money, competence.
69
How should resources be assigned
Two views: market-based and resource-based view
Market-based view: what could be a success on the market?
Resource-based view: What are we good at? => If I'm good, I'll find a market.
Best: combine the two views.
70
Describe why structure follows strategy according to Chandler
Cost leadership strategy => centralisation
Quality leadership strategy => focus on process and quality of output
Diverse company => divisional structure (DiDi principle)
