1. Organizational Behavior, 9/E Schermerhorn, Hunt, and Osborn Prepared by Michael K. McCuddy Valparaiso University John Wiley & Sons, Inc.

2. Organizational Behavior: Chapter 172 Chapter 17 Study Questions  What is strategy and how is it linked to different types of organizational goals?  What are the basic attributes of organizations?  How is work organized and coordinated?  What are bureaucracies and what are the common structures?

3. Organizational Behavior: Chapter 173 Study Question 1: What is strategy and how is it linked to different types of organizational goals?  Strategy. – The process of positioning the organization in the competitive environment and implementing actions to compete successfully. – A pattern in a stream of decisions. Choices regarding goals and the way the firm organizes to accomplish them.

4. Organizational Behavior: Chapter 174 Study Question 1: What is strategy and how is it linked to different types of organizational goals?  Elements of conventional strategy decisions. – Choosing the types of contributions the firm intends to make to society. – Precisely whom the firm will serve. – Exactly what the firm will provide to others.

5. Organizational Behavior: Chapter 175 Study Question 1: What is strategy and how is it linked to different types of organizational goals?  Societal goals. – Reflect an organization’s intended contributions to the broader society. – Enable organizations to gain legitimacy, a social right to operate, and more discretion for their non-societal goals and operating practices. – Enable organizations to make legitimate claims over resources, individuals, markets, and products.

6. Organizational Behavior: Chapter 176 Study Question 1: What is strategy and how is it linked to different types of organizational goals?  Societal contributions and mission statements. – A firm’s societal contribution is often part of its mission statement. A written statement of organizational purpose. – A good mission statement identifies whom the firm will serve and how it will go about accomplishing its societal purpose.

7. Organizational Behavior: Chapter 177 Study Question 1: What is strategy and how is it linked to different types of organizational goals?  Output goals. – Define the type of business the organization is pursuing. – Provide some substance to the more general aspects of mission statements.

8. Organizational Behavior: Chapter 178 Study Question 1: What is strategy and how is it linked to different types of organizational goals?  Systems goals. – Concerned with the conditions within the organization that are expected to increase the organization’s survival potential. – Typical systems goals include growth, productivity, stability, harmony, flexibility, prestige, and human resource maintenance. – Systems goals must often be balanced against one another.

9. Organizational Behavior: Chapter 179 Study Question 1: What is strategy and how is it linked to different types of organizational goals?  Well-defined systems goals can: – Focus managers’ attention on what needs to be done. – Provide flexibility in devising ways to meet important targets. – Be used to balance the demands, constraints, and opportunities facing the firm. – Form a basis for dividing the work of the firm.

10. Organizational Behavior: Chapter 1710 Study Question 2: What are the basic attributes of organizations?  Successful organizations develop a structure consistent with the pattern of goals established by senior management.  The formal structure shows the planned configuration of positions, job duties, and the lines of authority among different parts of the organization.  The formal structure of the firm is also known as the division of labor.

11. Organizational Behavior: Chapter 1711 Study Question 2: What are the basic attributes of organizations?  Vertical specialization. – A hierarchical division of labor that distributes formal authority and establishes where and how critical decisions are to be made. – Creates a hierarchy of authority. An arrangement of work positions in order of increasing authority. – Organization charts are diagrams that depict the formal structures of organizations.

12. Organizational Behavior: Chapter 1712 Study Question 2: What are the basic attributes of organizations?

13. Organizational Behavior: Chapter 1713 Study Question 2: What are the basic attributes of organizations?  Chain of command. – A listing of who reports to whom up and down the organization.  Unity of command. – Each person has only one boss and each unit one leader.  Span of control. – The number individuals reporting to a supervisor.

14. Organizational Behavior: Chapter 1714 Study Question 2: What are the basic attributes of organizations?  Line units. – Work groups that conduct the major business of the organization.  Staff units. – Work groups that assist the line units by providing specialized expertise and services to the organization.

15. Organizational Behavior: Chapter 1715 Study Question 2: What are the basic attributes of organizations?  Internal versus external units. – Internal line units. Transform raw materials and information into products and services. – External line units. Maintain outside linkages. – Internal staff units. Assist the line units in performing their functions. – External staff units. Assist the line units with outside linkages and act to buffer internal operations.

16. Organizational Behavior: Chapter 1716 Study Question 2: What are the basic attributes of organizations?

17. Organizational Behavior: Chapter 1717 Study Question 2: What are the basic attributes of organizations?  Some firms are outsourcing many of their staff functions.  Use of information technology to streamline operations and reduce staff.  Most organizations use a variety of means to specialize the vertical division of labor.  Best pattern of vertical specialization depends on environment, size, technology, and goals.

18. Organizational Behavior: Chapter 1718 Study Question 2: What are the basic attributes of organizations?  Control. – The set of mechanisms used to keep actions or outputs within predetermined limits. – Deals with: Setting standards. Measuring results against standards. Instituting corrective action.

19. Organizational Behavior: Chapter 1719 Study Question 2: What are the basic attributes of organizations?  Output controls. – Focus on desired targets and allow managers to use their own methods to reach defined targets. – Part of overall method of managing by exception. – Promote flexibility and creativity.

20. Organizational Behavior: Chapter 1720 Study Question 2: What are the basic attributes of organizations?  Process controls. – Specify the manner in which tasks are accomplished. – Types of process controls. Policies, procedures, and rules. Formalization and standardization. Total quality management controls.

21. Organizational Behavior: Chapter 1721 Study Question 2: What are the basic attributes of organizations?  Policies, procedures, and rules. – Policies. Guidelines for action that outline important objectives and broadly indicate how activities are to be carried out. – Procedures. Identify the best method for performing a task, show which aspects of a task are most important, or outline how an individual is to be rewarded.

22. Organizational Behavior: Chapter 1722 Study Question 2: What are the basic attributes of organizations?  Policies, procedures, and rules (cont.). – Rules. Describe in detail how a task or a series of tasks is to be performed, or indicate what cannot be done. – Policies, procedures, and rules are often used as substitutes for direct managerial supervision.

23. Organizational Behavior: Chapter 1723 Study Question 2: What are the basic attributes of organizations?  Formalization. – The written documentation of policies, procedures, and rules to guide behavior and decision making.  Standardization. – The degree to which the range of allowable actions in a job or series of jobs is limited so that uniform actions occur.

24. Organizational Behavior: Chapter 1724 Study Question 2: What are the basic attributes of organizations?  Deming’s 14 points for achieving total quality management. – Create a consistency of purpose in the company to innovate; put resources into research and education, and into maintaining equipment and new production aids. – Learn a new philosophy of quality to improve every system. – Require statistical evidence of process control and eliminate financial controls on production.

25. Organizational Behavior: Chapter 1725 Study Question 2: What are the basic attributes of organizations?  Deming’s 14 points for achieving total quality management (cont.). – Require statistical evidence of control in purchasing parts. – Use statistical methods to isolate the sources of trouble. – Institute modern on-the-job training. – Improve supervision to develop inspired leaders. – Drive out fear and instill learning. – Break down barriers between departments.

26. Organizational Behavior: Chapter 1726 Study Question 2: What are the basic attributes of organizations?  Deming’s 14 points for achieving total quality management (cont.). – Eliminate numerical goals and slogans. – Constantly revamp work methods. – Institute massive training programs for employees in statistical methods. – Retrain people in new skills. – Create a structure that will push, every day, on the above 13 points.

27. Organizational Behavior: Chapter 1727 Study Question 2: What are the basic attributes of organizations?  Centralization and decentralization. – Centralization. Degree to which the authority to make decisions is restricted to higher levels of management. – Decentralization. Degree to which the authority to make decisions is given to lower levels in an organization’s hierarchy.

28. Organizational Behavior: Chapter 1728 Study Question 2: What are the basic attributes of organizations?  Benefits of decentralization. – Higher subordinate satisfaction. – Quicker response to a series of unrelated problems. – Assists in on-the-job training of subordinates for higher-level positions – Encourages participation in decision making.

29. Organizational Behavior: Chapter 1729 Study Question 3: How is work organized and coordinated?  Horizontal specialization. – A division of labor that establishes specific work units or groups within an organization. – Often referred to as departmentation. – Whenever managers divide tasks and group similar types of skills and resources together, they must also be concerned with coordination.

30. Organizational Behavior: Chapter 1730 Study Question 3: How is work organized and coordinated?

31. Organizational Behavior: Chapter 1731 Study Question 3: How is work organized and coordinated?

32. Organizational Behavior: Chapter 1732 Study Question 3: How is work organized and coordinated?

33. Organizational Behavior: Chapter 1733 Study Question 3: How is work organized and coordinated?  Coordination. – The set of mechanisms that an organization uses to link the actions of its units into a consistent pattern. – Within a unit, much of the coordination is handled by its manager. – Smaller organizations rely on management hierarchy for coordination. – As the organization grows, more efficient and effective methods of coordination are required.

34. Organizational Behavior: Chapter 1734 Study Question 3: How is work organized and coordinated?  Personal methods of coordination. – Produce synergy by promoting dialogue, discussion, innovation, creativity, and learning, both within and across units. – Common personal methods of coordination are direct contact between and among organizational members and committee memberships. – Mix of personal coordination methods should be tailored to subordinates, skills, abilities, and experiences.

35. Organizational Behavior: Chapter 1735 Study Question 3: How is work organized and coordinated?  Impersonal methods of coordination. – Produce synergy by stressing consistency and standardization so that individual pieces fit together. – Often are refinements and extensions of process controls. – Historical use of specialized departments to coordinate across units. – Contemporary use of matrix departmentation and management information systems for coordination.

36. Organizational Behavior: Chapter 1736 Study Question 4: What are bureaucracies and what are the common structures?  Bureaucracy. – An ideal form of organization, the characteristics of which were defined by the German sociologist Max Weber. – Relies on a division of labor, hierarchical control, promotion by merit with career opportunities for employees, and administration by rule.

37. Organizational Behavior: Chapter 1737 Study Question 4: What are bureaucracies and what are the common structures?

38. Organizational Behavior: Chapter 1738 Study Question 4: What are bureaucracies and what are the common structures?  Mechanistic type of bureaucracy (machine bureaucracy). – Emphasizes vertical specialization and control. – Stresses rules, policies, and procedures; specifies techniques for decision making; and use well-documented control systems. – Often used with a low cost leader strategy.

39. Organizational Behavior: Chapter 1739 Study Question 4: What are bureaucracies and what are the common structures?  Benefits of the mechanistic type. – Efficiency.  Limitations of the mechanistic type. – Employees dislike rigid designs, which makes work motivation problematic. – Unions may further solidify rigid designs. – Key employees may leave. – Hinders organization’s capacity to adjust to subtle environmental changes or new technologies.

40. Organizational Behavior: Chapter 1740 Study Question 4: What are bureaucracies and what are the common structures?  Organic type of bureaucracy (professional bureaucracy). – Horizontal specialization. – Procedures are minimal, and those that do exist are not highly formalized. – Used to pursue strategies that emphasize product quality, quick response to customers, or innovation.

41. Organizational Behavior: Chapter 1741 Study Question 4: What are bureaucracies and what are the common structures?  Benefits of the organic type. – Good for problem solving and serving individual customer needs. – Centralized direction by senior management is less intense. – Good at detecting external changes and adjusting to new technologies.  Limitations of the organic type. – Less efficient than mechanistic type. – Restricted capacity to respond to central management direction.

42. Organizational Behavior: Chapter 1742 Study Question 4: What are bureaucracies and what are the common structures?  Common types of hybrid structures. – Divisional firm. Composed of quasi-independent divisions so that different divisions can be more or less organic or mechanistic. – Conglomerate. A single corporation that contains a number of unrelated businesses.

43. Organizational Behavior: Chapter 1743 Study Question 4: What are bureaucracies and what are the common structures?  The conglomerate simultaneously illustrates three key points that will be the focus of Chapter 18. – All structures are combinations of the basic elements. – There is no one best structure. – The firm does not stand alone but is part of a larger network of firms that compete against other networks.

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