OT W1.B

Question 1

What social innovations allowed for the emergence of bureaucracy in the 17th and 18th century (in Europe)

Answer 1

1. Important legal inventions created the possibility for longer-term investments in large firms (legal attributes)
2. Important managerial innovations enabled the management of core processes at larger scales (Taylorism and Fordism)
3. Ensuring right and left hand cooperation

Question 2

In short: What is the corporation?

Answer 2

A firm/ legal entity with certain legal attributes

that make it capable of owning property, entering into contracts, and standing in court independently of its owners

Question 3

What legal attributes do we associate with the corporation?

Answer 3

1. Representation
2. Entity Shielding
3. Limited liability
4. Capital lock-in
5. Tradable shares

Question 4

In corporations: what is entity shielding?

Answer 4

A legal attribute that protects company assets from personal creditors of the owners

The counterpart of limited liability

Question 5

In corporations: what is limited liability?

Answer 5

A legal attribute that shields personal assets from company creditors, stockholders are not liable for company debt

The counterpart of entity shielding

Question 6

In corporations: what is capital lock-in?

Answer 6

A legal attribute that prevents investors from withdrawing their investments in the firm

Question 7

In corporations: what are tradable shares?

Answer 7

A legal attribute that allows shareholders to sell their stocks at any time without input from other shareholders

Question 8

How does the legal attribute representation contribute within corporations?

Answer 8

It allows for running parallel businesses. Principles can enable agents to open up new businesses (without direct orders).

Question 9

How do the legal attributes entity shielding and limited liability contribute within corporations?

Answer 9

Both attributes decrease the risk for investors (protecting from the firm and other investors), making it easier to attract investments

Question 11

How does the legal attribute tradable shares contribute within corporations?

Answer 11

attract large investments because it allows owners to exit by simply liquidating their investments, thereby the corporation also does not lose its investments

Question 12

How did the corporation arise from overseas trade within the Netherlands?

Answer 12

After some secret information on trade routes to Asia was revealed in 1595. The first expeditions were financed in the traditional manner, as the funding of single voyages ended after completion. However, soon it became clear that a legal form that promised more large and long-term investment would promise a higher return on investment (ROI).

Question 13

What are the four Tayloristic principles?

Answer 13

1. Develop a science for each element of work, replacing the rule of thumb method
2. Scientifically select and train your wokrforce
3. Management monitors the workforce in order to ensure the compliance to the developed science
4. There is a strictly vertical division, the manager takes over all the work for which the workmen are not suited

Question 14

What are the main features of Fordism?

Answer 14

1. Combine standardization with automation
2. Establish the lowest possible unit-price
3. Vertical integration, as a result there is a steady flow of resources
4. High wages, resulting in high demand for Ford work, decreasing union influence as well as enabling the selection of the most suited workers

Vertical integration= absorbing parts of the longer supply chain

Question 15

What were the main challenges which Fordism tackled?

Answer 15

• The high cost of consumer goods resulting in limited demand for complex consumer goods
• High control costs associated with scientific management making it impossible to increase output

Question 16

What were the main challenges which Taylorism tackled?

Answer 16

• The increasing pressures for efficiency
• Limits/ inefficiencies as a result of the rule of thumb method

Question 17

What are the three types of legitimate domination

Answer 17

• Traditional Authority
• Charismatic authority
• Rational-legal authority

Question 18

What is traditional authority based on?

Answer 18

On an established belief or tradition

Question 19

What is charismatic authority based on?

Answer 19

The authority of one charismatic leader/ figure

Question 20

What is rational-legal authority based on?

Answer 20

on a basis of rules and regulations formulated by someone with the right to do so.

Question 21

Why do we ‘need’ bureaucracy?

Answer 21

Because…
1. Of bounded rationality: humans cannot always make rational decisions
2. To achieve complex tasks: for the progress of all social collectives we rely on rules, at least to a certain extent

Question 22

What are the six core features in a bureaucratic organization (as mentioned within video)

Answer 22

1. Clearly defined division of labor
2. Hierarchical structure of offices
3. Written guidelines prescribing performance criteria
4. Recruitment to offices are based on specialization and expertise
   Not because of nepotism or divinely chosen
5. Duties and authority are attached to positions, not individuals
6. Office holding as a career or vocation

Question 23

Adler & Borys distinguish two types of rules. Name them.

Answer 23

• Enabling rules= good, well designed rules
• Coercive rules= bad/ badly designed rules

Question 24

In what field did Adler & Borys look to find the answer to their research question? And why did studies within this field provide an answer?

Answer 24

Material technology
1. Both are examples of certified ‘know hows’, we are not sure of how or why they work but they do
2. The same problem in research on automation as in the problem that we now have in research
on formalization, namely contradictory (positive and negative) results
3. Recent automation research distinguished different types of automation
Equipment could be designed with a:
a. Fool proofing and deskilling rationale
b. Usability and upgrading rationale

Question 25

**What were the four dimension along which material technology was assesed?**

Answer 25

1. Repair 2. Internal transparency 3. Global transparency 4. Flexibility

Question 26

**In the dimension: repair, what conclusions were made on coercive rules?**

Answer 26

* Rule-changes need to be approved by managers * Standards are not formulated by those who actually work with them * Deviation from the rules is treated as suspect

Question 27

**In the dimension: repair, what conclusions were made on enabling rules?**

Answer 27

* Breakdowns are treated as learning opportunities * Standardization is focused on methods and not instructions (how; not when and in what order)

Question 28

**In the dimension: internal transparency what conclusions were made on coercive rules?**

Answer 28

* Procedures are formulated as lists of flat assertions of duties * No rationale (why and context on the rule) is provided

Question 29

**In the dimension: internal transparency what conclusions were made on enabling rules?**

Answer 29

* Procedures/ rules provide visibility into the process; the rule explains itself * Metrics are provided to help users assess their performance and understanding of the rule

Question 30

**In the dimension: global transparency, what conclusions are made on coercive rules?**

Answer 30

* Zones are of accountability are limited and only local information is provided * Rule making processes are largely opaque to those who are concerned, your only aware of your own rules

Question 31

**In the dimension: global transparency, what conclusions are made on coercive rules?**

Answer 31

* Zones of accountability are limited and only local information is provided * Rule-making processes are largely opaque to those who are concerned

Question 32

**In the dimension: flexibility, what conclusions are made on coercive rules?**

Answer 32

* Each process is defined in detailed steps that me be followed * Deviations must be authorized by supervisors

Question 33

**In the dimension: flexibility, what conclusions are made on coercive rules?**

Answer 33

* Only managers are involved in rule-making * Once established, rules are held sacred. Changing or deviating is viewed problematic.

Question 34

How should the rule-making process (i.e. managerial decision-making) look to support the designing of enabling rules?

Answer 34

* Employees should be involved in rule-making and can make adjustments * Rules should be designed with a usability focus

Question 35

**What are the three main intra-organizational contingencies/ obstacles in implementing enabling rules ?**

Answer 35

* **Goal (in-)congruence** between organizational and employee’s goals * **Power (a-)symmetries** between management and employees * **Stimulus** for improvement or lack therefore

Question 36

What are the three main stimuli for the emergence of enabling bureaucracies?

Answer 36

**1. Enabling logic has growing legitimacy in broader culture** *a. Most people recognize coercive bureaucracies as (necessary) evil and accept it because of this b. Recognizing effective alternatives will result in motivation to change* **2. Advantages of enabling logic can become a competitive advantage** *a. Knowledge-intensive industries rely on high degrees of employee engagement to outperform their competitors* b. As a result, there is an increase in agility **3. Automation generally increases advantages of enabling form**