OT- W2

Question 1

What is organizational design?

Answer 1

“An organizational design is the […] framework of roles and procedures, often represented in an organization chart.”

Question 2

What is organizational structure?

Answer 2

The way the tasks and resources are distributed within an organization?.

Question 3

What are the three types of organizational structure (mentioned within book)?

Answer 3

Multidivisional structure (M-form): clear and simple structure. Every product or product grouphas his
own departments (marketing, HRM, Technical support etc)
Matrix organizational structure: employees report to two managers: the functional or division
manager and the projectmanager. It can be best used for temporary projects
+ improves the communication between the different departments.
- chaos and administrative overload
Holacratic organizational structure: self-managing organization, without hierarchy. No
determined roles.
+ more satisfied and enthusiastic workforce

Question 4

Name the five dimensions of organizational design as by Weber

Answer 4

1. Standardization
2. Specialization
3. Formalization
4. Centralization
5. Configuration

Question 5

Explain specialization (Weber)

Answer 5

The extent to which the organization has highly specialized job descriptions and designs.

Question 6

Explain standardization (Weber)

Answer 6

The extent to which the organization has many standard manuals of procedures involving the prescription of constant and invariant ways of doing
things.

Question 7

Explain formalization (Weber)

Answer 7

The extent to which the organization’s total range of actions and procedures are covered by [written] policies and agreements.

Question 8

Explain centralization (Weber)

Answer 8

The extent to which the organization ensures that decision-making is referred to the apex of the organization, or distributed to lower levels.

Question 9

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Explain configuration (Weber)

Answer 9

The shape of authority structured as a system of role relationships

Question 10

What is the basic assumption within contingency theory?

Answer 10

The assumption that the effectiveness of a specific solution is dependent on certain exogenous (external) effects or circumstances. For organizations this means that the effectiveness of a particular organizational design or strategy depends upon contextual factors.

Question 11

‘Who’ laid the foundation for the studies within contigency theory?

Answer 11

The Aston school

Question 12

In a study by the Aston school what was found on organizational size as a CF?

Answer 12

The larger the organizational size, the more bureaucratic the organization.

Question 13

In the study by Thomas and Burns, what were the basic findings in relation to environmental stability as a CF?

Answer 13

• Mechanistic organizations are most successful in environments characterized by high levels of stability
  This makes sense because when there is a lack of competition it makes sense to design an organization to be rigid but highly efficient
• Organic organizations are most successful in environments characterized by low levels of stability

Question 14

What are the characteristics of a mechanistic organization?

Answer 14

• Narrowly defined routine tasks
• Formal hierarchy & clearly defined
  authority structure
• Emphasis on vertical communication
• Top-down decision making
• Focus on obedience and loyalty

Question 15

What are the characteristics of an organic organization?

Answer 15

• Specialized areas of knowledge
• Frequent redefinition and reformulation
  of responsibilities
• Emphasis on horizontal forms of
  communication
• High proportion of mental labor
• Focus on commitment to the larger
  collective interest of the organization

Question 16

Who studied the relationship between organizational design, technology and organizational performance?

Answer 16

Joan Woodward (technical complexity)

Question 17

What is technical complexity?

Answer 17

• The hardware used in performing work but also the skills and knowledge of workers and the characteristics of objects on which work is performed.
• A measure of the extent to which the production process can be programmed so it is controlled and made predictable.

Question 18

We distinguish three types of technical complexity. What types are there?

Answer 18

1. Small-unit production (low): single-unit items produced in small batches and small quantities involving a lot of manual labor. The conversion process depends on workers’ skills and knowledge rather than machines.
2. Mass production (medium): large batch manufacturing, conversion is partly automated and conducted by machines but people are still directly involved.
   a. e.g. factories which use conveyer belts; workers still do the actual work
3. **Process production (high): **continuous-process production, people are only involved to monitor while the process is fully automated.
   a. E.g. atomic reactors or reactor energy

Question 19

What are the main findings from Woodward’s study on technical complexity?

Answer 19

1. The more complex the technology, the larger is the number of managerial and administrative personnel
2. The more complex the technology, the more levels of authority –> tall hierarchy
3. The span of control of first-line managers increases from Unit production systems to Mass production systems and then decreases from Mass production systems to Process Production systems
4. Mass production is the most bureaucratic

Question 20

Name the weakness of Woodward’s study on technical complexity

Answer 20

The level of technological complexity is assigned to entire organizations when in reality the level of technological complexity may vary within organizations depending on department.

Question 21

Who did research on task interdependence?

Answer 21

James Thompson

Question 22

Name the three types of task interdependence

Answer 22

1. Pooled: two or more sub-units have no direct resource flows between them but draw resources from the same corporate pools and contribute output to the same pool of resources.
2. Sequential: The sub-units have direct, uni-directional resource flows between each sub-unit so unit B cannot start working before subunit A has provided its product. E.g. factory work
3. Reciprocal:A configuration of subunits in which the outputs become inputs for the others.
   *e.g. working in a creative team for, for instance a magazine; the editors can’t get to work before the writers and the writers can’t complete before editors approve. *

Question 23

There are three theories on the relationship between structure and strategy. What are these?

Answer 23

1. Structure determinism: structure follow strategy
2. Strategic choice: Strategy can also follow structure
3. Structural adjusment to regain fit (Donaldson): states that if there’s a shift in the CF this will lead to a decline in the effectiveness which leads to pressure for change which in turn causes structural changes which restore effectiveness.

Question 24

What does the structural adjustment to regain fit model argue?

Answer 24

It argues that if there’s a shift in a CF this will lead to a decline in the effectiveness which leads to pressure for change which in turn causes structural changes which restore effectiveness:
1. Change in contingency factor creates an increase in the misfit between that given CF and the structure
This effect is enhanced when the firm is in an illiberal environment
2. There is pressure for top management to adjust the structure in order to reduce misfit

Illiberal environment: environment which exercises much pressure

Question 25

From the Donaldson study it could be concluded that?

Answer 25

• Functional forms work well with low diversification
• Product divisional form work best with higher diversification

Question 26

Background on the Donaldson study

Answer 26

Methods:re-analyzing the data of 600 firms on firm structure and strategy.
Results:the patterns were resistant and held within each country and within each decade.
* Organizations change their structure because there is mismatch between structure and strategy not when the contingency factors change).
* Organizations strive for a fit between strategy and structure.
* Organizations usually change their structure, not so much their strategy (which is a
contingency factor).
* Fit is a cause of performance.
* Conclusion: misfit between stratery and structure motivates change in structure.

Question 27

What was the motivation for the research by Martela on SMO’s?

Answer 27

He recognizes the rise of SMO’s and how they tackle the six universal problems of organizing in novel ways. He concludes this structure may be a better fit for some contexts and so wanted to deepen the theory on this topic.

Question 28

What are the six universal problems of organizing?

Answer 28

1. Task division
The mapping/ establishing of the given goal in to feasible tasks and subtasks that can be assigned to individual agents.
This may be done in a bottom-up or top-down fashion.
2. Task allocation
The assigning of the (sub-)tasks to the appropriate agents as to make sure they are accomplished.
3. Rewarding desired behavior
The organization needs to provide rewards to motivate their agents to accomplish their tasks.
Which may be done through financial rewards, status and opportunities for self-expression.
4. Addressing freeriding
Establishing mechanisms that ensure that rewards are only allocated to those who deserve them.
5. Providing direction
Agents have to execute their work and make decisions in a manner that contributes to the organizations overarching goals. So that, even in moments of doubt employees know what to do next.
E.g. strictly limiting decision rights.
6. Ensuring coordination
Given that the accomplishment of tasks depends on the accomplishment of other tasks, mechanisms should be established which ensure the coordination of these interdependent tasks.
e.g. Setting up meetings, clear and available schedules

Question 29

An organization is…

Answer 29

1. A multiagent system (multiple people/ actors);
2. with identifiable boundaries (it is possible to distinguish acting for the organization from not doing this);
3. and system-level goals/ purpose;
4. where the constituent agent’s efforts are expected to make a contribution.

Question 30

Compare bureaucratic organizations vs. SMO’s. How do they tackle issue 1: Task allocation?

Answer 30

Bureaucratic:
We recognize a top-down process in which top-management establish something like a strategy paper in which the most important goals are highlighted. Then, the most necessary tasks are identified which are then divided into sub-tasks.
SMO’s:
We recognize a top-down as well as bottom-up process in which management gives an overarching task division however, employees also has the responsibility and authority to create new tasks.
–> As a result SMO’s are more agile and are able to react faster as there is no need for an idea to travel up and back-down which results in delay.

Question 31

Compare bureaucratic organizations vs. SMO’s. How do they tackle issue 2: Task division?

Answer 31

Bureaucratic:
We recognize a top-down process in which tasks and responsibilities are allocated by managers to their subordinates.

SMO’s
Workers have the authority to pick-and-choose tasks according to skills and wants.
–> SMO’s are more agile and effective as workers mostly do the work they are motivated to do.

Question 32

Compare bureaucratic organizations vs. SMO’s. How do they tackle issue 3: Rewarding desired behavior?

Answer 32

Bureaucratic
Primarily carried out by monetary compensation, bonus system and advancement options provided by supervisors.

SMO’s
Monetary compensation with salary levels and bonuses is often determined by a sit-down peer-based process in which added worth is discussed. Much value is placed on intrinsic rewards/ self-actualization .

Question 33

Compare bureaucratic organizations vs. SMO’s. How do they tackle issue 4: Adressing freeriding?

Answer 33

Bureaucratic:
Close monitoring of the entire process and provided outputs by supervisors and managers.

SMO’s
Employees are mainly held accountable by each other

Question 34

Compare bureaucratic organizations vs. SMO’s. How do they tackle issue 5: providing direction?

Answer 34

Bureaucratic:
Strict task boundaries and meticulous instructions, standardized and routinized work. Which limits the need of spreading of information.

SMO’s
Transparent and active distribution of information to ensure agents knowledge on goals and ensures the employee’s capability to make decisions which contribute to the overarching goals.
<– It is tried to foster a feeling of commitment and purpose,

Question 35

Compare bureaucratic organizations vs. SMO’s. How do they tackle issue 6: Ensuring coordination?

Answer 35

Bureaucratic
Less coordination is required, standardized procedures and top-down task allocation and monitoring suffice the level of coordination needed.

SMO’s
Constant coordination is required, intra- and inter-team coordination is accomplished through coordination roles and use of extensive IT systems.

Question 36

What is horizontal differentiation?

Answer 36

The way an organization groups organizational tasks
into roles and roles into subunits (functions and
divisions)

Question 37

What is vertical differentiation?

Answer 37

The way an organization designs its hierarchy
regarding the authority and relative rank of people and creates reporting relationships to link organizational roles and subunits