Chapter 9 Flashcards
1
Q
THE RESPONSIVE ORGANIZATION
organic structure
A
- an organizational form that emphasizes flexibility
- can be described as follows :
1. Job holders have broader responsibilities that change as the need arises.
2. Communication occurs through advice and information rather than through orders and instructions.
3. Decision making and influence are now decentralized and informal.
4. Expertise is highly valued
5. Job holders rely more heavily on judgement than on rules.
6. Obedience to authority is less important that commitment to the organization’s goals.
7. Employees depend more on one another and relate more informally and personally. - people in organic organizations work more as teammates than as subordinates who take orders from the boss
- the more organic a firm is, the more responsive it will be to changing competitive demands and market realities
2
Q
THE RESPONSIVE ORGANIZATION
mechanistic organization
A
- a form of organization that seeks to maximize internal efficiency
3
Q
STRATEGY AND ORGANIZATIONAL AGILITY
strategic alliance
A
- a formal relationship created among independent organization’s with the purpose of joint pursuit of mutual goals
- allow participants to respond to customer demands or environmental threats far faster and less expensively than each would be able to do on its own.
- in a strategic alliance, individual organizations share administrative authority, form social links, and accept joint ownership
- they occur between companies and their competitors, governments, and universities, and also crosses national and cultural boundaries
- companies form strategic alliances to develop new technologies, enter new markets, and reduce manufacturing costs.
- rather than hiring experts who understand the technology and market segments for each new product, companies can form alliances with partners that already have those experts on board
- for the alliance to work, partners also must consider one another’s areas of expertise and incentives involved in the structure of the alliance.
- managers must also foster and develop the human relationships in the partnership
4
Q
STRATEGY AND ORGANIZATIONAL AGILITY
learning organization
A
- an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights
- skilled at solving problems, experimenting with new approaches, learning from their own experiences, learning from other organizations, and spreading knowledge quickly and efficiently
- two areas of learning :
1. Exploitation, or continuously learning ways to operate more efficiently and effectively in the company’s first domain.
2. Exploration, or uncovering new areas in which the company can excel.
5
Q
STRATEGY AND ORGANIZATIONAL AGILITY
The best alliances have true partnerships meet this criteria
A
- Individual excellence :
- Both partners add value, and their motives are positive (pursue opportunity) rather than negative (mask weaknesses). - Importance :
- Both partners want the relationship to work because it helps them meet long-term strategic objectives. - Interdependence :
- The partners need each other; each helps the other reach its goal. - Investment :
- The partners devote financial and other resources to the relationship. - Information :
- The partners communicate openly about goals, technical data, problems, and changing situations. - Integration :
- The partners develop shared ways or operating; they teach each other and learn from each other. - Institutionalization :
- The relationship has formal status with clear responsibilities. - Integrity :
- Both partners are trustworthy and honorable.
6
Q
STRATEGY AND ORGANIZATIONAL AGILITY
Important activities that happen at all levels and in all functions of a learning organization
A
- Engaging in disciplined thinking and paying attentions to details, so decisions are based on data and evidence, not guesswork and assumptions.
- Searching constantly for new knowledge and ways to apply it, looking for broader horizons and opportunities, not just quick fixes for current problems.
- Valuing and rewarding individuals who expand their knowledge and skill in areas that benefit the organization.
- Reviewing successes and failures carefully to find lessons and deeper understanding.
- Benchmarking - that is, identifying and implementing the best business practices of other organizations, stealing ideas shamelessly.
- Sharing ideas throughout the organization via reports, information systems, informal discussions, site visits, education, training, and mentoring of less experienced by more experienced ones.
7
Q
STRATEGY AND ORGANIZATIONAL AGILITY
Issues related to core capabilities that managers need to focus on to strengthen their firms’ competitiveness
A
- Identify core capabilities
- Acquire or build core capabilities that will be important for the future
- Keep investing in capabilities so that the firm remains world class and better than competitors
- Extend capabilities to find new applications and opportunities for the markets of tomorrow
- First, managers must accumulate the right resources (such as talented people) by determining what resources they need, acquiring and developing those resources, and eliminating resources that don’t provide value.
- Next, they combine the resources in ways that give the organization capabilities, such as researching new products or resolving problems for customers. These combinations may involve knowledge sharing and alliances between departments or with other organizations.
- finally, managers need to leverage or exploit their resources. They do this by identifying the opportunities where their competencies deliver value to customers - say, by creating new products or by delivering existing products better than competitors - and then by coordinating and deploying the employees and other resources needed to respond to those opportunities.
8
Q
STRATEGY AND ORGANIZATIONAL AGILITY
high-involvement organization
A
- a type of organization in which top management ensures that there is consensus about the direction in which the business is heading
- leader seeks input from his or her top management team and from lower levels of the company
- task forces, study groups, and other techniques are used to foster participation in decisions that affect the entire organization
- continual feedback to participants regarding how they are doing compared with the competition and how effectively they are meeting the strategic agenda
- structurally, this usually means that even lower-level employees have a direct relationship with a customer or supplier and thus receive feedback and are held accountable for a good or service delivery
- organizational form is a flat, decentralized structure built around a customer, good, or service
- employee involvement is particularly powerful when the environment changes rapidly, work is creative, complex activities require coordination, and firms need more major breakthroughs in innovation and speed, when companies need to be more responsive.
9
Q
ORGANIZATIONAL SIZE AND AGILITY
economies of scope
A
- economies in which materials and processes employed in one product can be used to make other related products
- with such advantages, huge companies with lots of money may be best at taking on large foreign rivals in huge global markets
10
Q
ORGANIZATIONAL SIZE AND AGILITY
downsizing
A
- the planned elimination of positions or jobs
- common approaches include eliminating functions, hierarchical levels, or even whole units
- another trend is to replace full-time employees with less expensive part-time or temporary workers
- managers usually opt to downsize only in response to some kind of pressure because they recognize that people will be unemployed, frightened, and perhaps unable to pay their bills
- traditionally, companies have downsized when demand falls and seems unlikely to rebound in the short run.
- laying off workers is a way to avoid paying people who aren’t needed to produce or ship goods, as well as to lower costs so that the company remains profitable- or at least viable - until the next upturn in business
- in recent decades, companies have used downsizing as a way to become more efficient which caused a trend to change the types of positions that were eliminated
- downsizing in response to a slowdown in demand has tended to have the most impact on operating level jobs in manufacturing firms
- downsizing to improve efficiency has focused on eliminating layers of management and bureaucratic structures, so those layoffs target white-collar middle managers
- done appropriately, with inefficient layers eliminated and resources focused more on adding customer value than on wasteful internal processes, downsizing can indeed lead to a more agile, flexible, and responsive firm.
11
Q
ORGANIZATIONAL SIZE AND AGILITY
rightsizing
A
- a successful effort to achieve an appropriate size at which the company performs most effectively
12
Q
ORGANIZATIONAL SIZE AND AGILITY
What can be done to manage downsizing effectively and to help make it more effective?
A
- Firms should avoid excessive (cyclical) hiring to help reduce need to engage in major or multiple downsizing
- Firms must avoid common mistakes such as making slow, small, frequent layoffs; implementing voluntary early retirement programs that entice the best people to leave; laying off so many
people that the company’s work can no longer be performed
Improve : - Use downsizing only as a last resort, when other methods of improving performance by innovating or changing procedures have been exhausted.
- Choose positions to be eliminated by engaging in careful analysis and strategic thinking.
- Train people to cope with the new situation.
- Identify and protect talented people
- Give special attention and help to those who have lost their jobs.
- Communicate constantly with people about the process and invite ideas for alternative ways to operate more efficiently.
- Identify how the organization will operate more effectively in the future and emphasize this positive future and the remaining employees’ new roles in attaining it.
13
Q
ORGANIZATIONAL SIZE AND AGILITY
survivor’s syndrome
A
- loss of productivity and morals in employees who remain after a downsizing
- they struggle with heavier workloads, wonder who will be next to go, try to figure out how to survive, lose commitment to the company and faith in their bosses, and become narrow-minded, self-absorbed, and risk-averse.
14
Q
CUSTOMERS AND THE RESPONSIVE ORGANIZATION
value chain
A
- the sequence of activities that flow from raw materials to the delivery of a good or service, with additional value created at each step
- Research and development : focus on innovation and new products
- Inbound logistics : receive and store raw materials and distribute them to operations
- Operations : transform raw materials into final product
- Outbound logistics : warehouse the product and handle its distribution
- Marketing and sales : identify customer requirements and get customers to purchase the product
- Service : offers customer support, such as repair, after the item has been bought
- when the total value created - what customers are willing to pay - exceeds the cost of providing the good or service, the result is the organization’s profit margin
15
Q
CUSTOMERS AND THE RESPONSIVE ORGANIZATION
customer relationship management (CRM)
A
- a multifaceted process focusing of creating two-way exchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns
- companies that use CRM effectively, it helps them understand, as well as anticipate, the needs of current and potential customers.
- continuous improvement includes continually changing to connect with customers, even without waiting for customers to make the first move
- as organizations focus on responding to customer needs, they soon find that the traditional meaning of a customer expands to include internal customers, which refers to the next process which highlights the idea of interdependence among related functions and means that all functions of the organization - not just marketing people - have to be concerned with customer satisfaction; any recipient of a person’s work, whether coworker, boss, subordinate, or external party, should be viewed as the customer.
16
Q
CUSTOMERS AND THE RESPONSIVE ORGANIZATION
total quality management (TQM)
A
- an integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that result high-quality goods and services
- is a comprehensive approach to improving product quality and thereby customer satisfaction
- characterized by a strong orientation toward customers (internal and external) and has become an umbrella theme for organizing work
- reorientation managers toward involving people across departments in improving all aspects of the business
- continuous improvement requires integrative mechanisms that facilitate group problem solving, information sharing, and cooperation across business functions which results in the organization operating in a more team-oriented manner
17
Q
CUSTOMERS AND THE RESPONSIVE ORGANIZATION
14 points of quality in total quality management
A
- Create consistency of purpose - strive for long-term improvement rather than short-term profit.
- Adopt the new philosophy - don’t tolerate delays and mistakes.
- Cease dependence on mass inspection - build quality into the process on the front end.
- End the practice of awarding business on price tag alone - build long-term relationships.
- Improve constantly and forever the system of production and service - at each stage.
- Institute training an retraining - continually update methods and thinking.
- Institute leadership - provide the resources needed for effectiveness.
- Drive out fear - people must believe it is safe to report problems or ask for help.
- Break down barriers among departments - promote teamwork.
- Eliminate slogans, exhortations, and arbitrary targets - supply methods not buzzwords.
- Eliminate numerical quotes - they are contrary to the idea of continuous improvement.
- Remove barriers to pride in workmanship - allow autonomy spontaneity.
- Institute a vigorous program of education and retraining - people are assets, not commodities.
- Take action to accomplish the transformation - provide a structure that enables quality.
18
Q
CUSTOMERS AND THE RESPONSIVE ORGANIZATION
six sigma quality
A
- a method of systematically analyzing work processes to identify and eliminate virtually all causes of defects, standardizing the processes to reach the lowest practicable level of any cause of customer dissatisfaction
- the product defects analyzed may include anything that results in customer dissatisfaction - for example, late delivery, wrong shipment, or poor customer service as well as problems with the product itself
- commitment to total quality requires a thorough, extensive, integrated approach to organizing
- a company can both improve its responsiveness to customers and demonstrate to them that it has done so by being certified for meeting widely recognized standards set by outside organization’s
19
Q
CUSTOMERS AND THE RESPONSIVE ORGANIZATION
ISO 9001
A
- a series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers
- eight principles :
1. Customer focus - learning and addressing customer needs and expectations.
2. Leadership - establishing a vision and goals, establishing trust, and providing employees with the resources and inspiration to meet goals.
3. Involvement of people - establishing an environment in which employees understand their contribution, engage in problem solving, and acquire and share knowledge.
4. Process approach - defining the tasks needed to carry out each process successfully and assigning responsibility for them.
5. Systems approach to management - putting processes together into efficient systems that work together effectively.
6. Continual improvement - teaching people how to identify areas for improvement and rewarding them for making improvements.
7. Factual approach to decision making - gathering accurate performance data, sharing the data with employees, and using the data to make decisions.
8. Mutually beneficial supplier relationships - working in a cooperative way with suppliers.
20
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
technology
A
- the systematic application of scientific knowledge to a new product, process, or service
- three characteristics of how work is done : small batch, large batch, and continuous process technologies
21
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
small batch
A
- technologies that produce goods and services in low volume
- called a job shop
- in the service industry, restaurants or doctors’ offices are examples of job shops because they provide a high variety of low-volume, customized services
- in a small batch organization, structure tends to be very organic, there tend not to be a lot of rules and formal procedures, and decision making tends to be decentralized
- emphasis on mutual adjustment among people
22
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
large batch
A
- technologies that produce goods and services in high volume
- also known as mass production technologies
- examples : in auto industry, GM, Ford, and Chrysler, in service industry, McDonald’s and Burger King
- production runs tend to be more standardized, and all customers receive similar (if not identical) products
- machines do physical work, people operate machines
- structure tends to be more mechanistic with more rules and formal procedures and decision making tends to be centralized with higher spans of control
- communication tends to be more formal in companies where hierarchical authority is more prominent.
23
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
mass customization
A
- the production of varied, individually customized products at the low cost of standardized, mass-produced products
- automobiles, clothes, computers, and other products are increasingly being manufactured to match each customer’s tastes, specifications, and budget.
24
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
Key features in mass customization
A
- Product design : collaborative design, significant input from customers; short product development cycles; constant innovation
- Operations and processes : flexible processes, business process reengineering (BPR), use of modules, continuous improvement (CI), reduced setup and changeover times, reduced lead times, JIT delivery and processing of materials and components, production to order, shorter cycle times, use of information technology (IT)
- Quality management : quality measured in customer delight, defects treated as capability failures
- Organizational structure : dynamic network of relatively autonomous operating units, learning relationships, integration of the value chain, team-based structure
- Workforce management : empowerment of employees, high value on knowledge, information, and diversity of employee capabilities, new product teams, broad job descriptions
- Emphasis : low-cost production of high-quality, customized products
25
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
continuous process
A
- a process that is highly automated and has a continuous production flow
- technologies that do not start or stop
- people are completely removed from the work itself
- very limited products produced
- done entirely by machines and/or computers
- structures can return to a more organic form because less monitoring and supervision are needed
- communication tends to be more informal in companies where fewer rules and regulations are established
27
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
computer-integrated management (CIM)
A
- the use of computer-aided design and computer-aided manufacturing to sequence and optimize a number of production processes
- can produce high-variety and high-volume products at the same time
- also offer greater control and predictability of production processes, reduced waste, faster throughout times, and higher quality
28
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
Effective operations for lean approach
A
- people are broadly trained rather than specialized
- communication is informal and horizontal among line workers
- equipment is general purpose
- work is organized in teams, or cells, that produce a group of similar products
- supplier relationships are long term and cooperative
- product development is concurrent, not sequential, and is done by cross functional teams
29
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
lean manufacturing
A
- an operation that strives to achieve the highest possible productivity and total quality, cost-effectively, by eliminating unnecessary steps in the production process and continually striving for improvement
- rejects are unacceptable, and staff, overhead,candy inventory are considered wasteful
- emphasis is on quality, speed, and flexibility more than on cost, efficiency, or hierarchy
- if an employee spots a problem, they are authorized to halt the operation and signal for help to correct the problem at its source so that processes can be improved and future problems avoided
- a company can develop, produce, and distribute products with half or less of the human effort, space, tools, time, and overall cost
30
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
time-based competition
A
- strategies aimed at reducing the total time needed to deliver a good or service
- logistics, just-in-time, and concurrent engineering
- JIT production systems reduce the time to manufacture products
- logistics speed the delivery of products to customers
- both are essential steps toward bringing products to customers in the shortest time possible.
31
Q
TECHNOLOGY AND ORGANIZATIONAL AGILITY
logistics
A
- the movement of the right goods in the right amount to the right place at the right time
- includes the great mass of parts, materials, and products moving via trucks, trains, planes, and ships from and to every region of the globe.
- RFID tags (radio frequency identification) automated readers can easily track where each product is in the distribution system, including which particular items are selling in each store
- perishable goods need to be speedy
