Topic 3A organizational culture
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Questions and Answers

Which of the following elements must be managed to effectively execute a strategic plan?

  • Financial forecasting
  • Competitor analysis
  • Organizational culture (correct)
  • Marketing strategies

Why is it essential for managers to act on a strategy after its formulation?

  • To effectively implement the strategic plan. (correct)
  • To maintain operational efficiency.
  • To reduce overall business costs.
  • To ensure compliance with industry regulations.

Besides organizational culture and structure, what additional area is crucial for successful strategy implementation?

  • Human Resources practices. (correct)
  • Public relations management.
  • Information technology infrastructure.
  • Supply chain optimization.

A company has a well-defined strategic plan. What is the immediate next step to ensure the strategy's success?

<p>Implementing the plan through managing organizational culture and structure. (A)</p> Signup and view all the answers

Which of the following is the most accurate description of ‘executing strategy’?

<p>The actions managers take to implement a strategic plan. (B)</p> Signup and view all the answers

An organization's culture, structure, and HR practices are most effectively viewed as:

<p>Three strands in a single rope supporting the organization's strategy. (C)</p> Signup and view all the answers

Which of the following best describes organizational culture?

<p>The shared, taken-for-granted implicit assumptions that a group holds. (A)</p> Signup and view all the answers

Organizational structure is primarily concerned with:

<p>Who reports to whom and who specializes in what work. (B)</p> Signup and view all the answers

Which of the following is NOT typically considered a core component of human resource practices?

<p>Public relations (A)</p> Signup and view all the answers

An organization that emphasizes employee collaboration and values flexibility over stability is likely operating under which type of culture?

<p>Clan (A)</p> Signup and view all the answers

Which organizational culture type is characterized by an external focus and values stability and control?

<p>Market (A)</p> Signup and view all the answers

A company that prioritizes innovation, adaptability, and quick responses to changes in the external environment likely operates with which type of organizational culture?

<p>Adhocracy culture (A)</p> Signup and view all the answers

Which organizational culture is best suited for a highly regulated industry that requires process management, efficiency, and reliability?

<p>Hierarchy (D)</p> Signup and view all the answers

Why is it crucial for managers to align organizational culture, structure, and HR practices with the overarching strategy?

<p>To ensure all organizational elements support and reinforce the strategic objectives, leading to enhanced performance. (A)</p> Signup and view all the answers

Which of the following best describes how to characterize an organization's culture?

<p>By observing the espoused values, enacted values, rites, rituals stories, symbols, and how they influence behavior. (C)</p> Signup and view all the answers

What is the first step that organizations should take when trying to change their culture?

<p>Identify the aspects of the current culture that hinder the company's vision and determine a desired, more effective culture. (C)</p> Signup and view all the answers

An organization chart typically illustrates which of the following key features of an organization?

<p>Levels of hierarchy, divisions of labor and formal reporting relationships. (B)</p> Signup and view all the answers

A company is structured into different departments based on the type of work they do (e.g., marketing, finance, operations). What type of organizational structure does this represent?

<p>Functional structure. (A)</p> Signup and view all the answers

Which organizational structure is characterized by a temporary network of independent companies that come together to exploit specific opportunities and then disband?

<p>Virtual structure. (C)</p> Signup and view all the answers

In a decentralized organization, where does the decision-making authority primarily lie?

<p>Distributed among various levels of the organization. (C)</p> Signup and view all the answers

A manufacturing company that subcontracts most of its production processes to other companies is an example of what type of structure?

<p>Hollow structure (B)</p> Signup and view all the answers

A small start-up is characterized by centralized decision-making, few formal rules, and employees handling multiple roles. Which organizational structure best describes this setup?

<p>Simple Structure (B)</p> Signup and view all the answers

A multinational corporation organizes its structure around different geographical regions, each responsible for its own sales and operations. Which organizational design is being utilized?

<p>Divisional Structure (D)</p> Signup and view all the answers

A tech startup leverages cloud-based services for its data storage, customer relationship management, and software development, while focusing primarily on product innovation and marketing. What type of organizational structure does this best represent?

<p>Hollow structure (C)</p> Signup and view all the answers

An engineering firm groups its employees by specialties such as structural, electrical, and mechanical engineering. Which type of organizational structure is this?

<p>Functional Structure (A)</p> Signup and view all the answers

An organization needs to enhance collaboration and teamwork across different departments to solve complex problems. Which organizational design would be most suitable?

<p>Horizontal Structure (D)</p> Signup and view all the answers

An automobile manufacturer sources its engine components from Germany, its electronic systems from Japan, and its interior from Italy, assembling the final product in the United States. This exemplifies which type of organizational structure?

<p>Modular structure (A)</p> Signup and view all the answers

A group of independent consultants forms a temporary alliance to bid on a large IT project. Once the project is completed, the alliance dissolves. This scenario is most characteristic of a:

<p>Virtual structure (B)</p> Signup and view all the answers

In a hospital setting, nurses report to both the head of nursing (a functional manager) and the head of a specific unit (e.g., cardiology, a divisional manager). Which organizational structure is being applied?

<p>Matrix Structure (D)</p> Signup and view all the answers

A fast-growing company initially operated with a highly adaptable and innovative culture. However, to support a new strategy focused on efficiency and cost reduction, which of the following adjustments is MOST critical?

<p>Realigning organizational culture, structure, and HR practices to reinforce efficiency. (A)</p> Signup and view all the answers

What is the potential consequence of neglecting to adapt Human Resources (HR) practices when a company transitions from a functional to a divisional structure?

<p>Decreased employee satisfaction due to unclear roles and responsibilities. (A)</p> Signup and view all the answers

At Mary Kay Cosmetics Co., top sales performers are awarded pink Cadillacs during celebratory events. This practice is best described as embodying which combination of cultural elements?

<p>Both a symbol and a rite/ritual, signifying success through ceremony. (B)</p> Signup and view all the answers

According to research on organizational culture, which culture type is most likely to foster positive employee attitudes and morale?

<p>Clan culture, characterized by its focus on collaboration and employee well-being. (A)</p> Signup and view all the answers

Organizations with market cultures tend to exhibit strengths in specific areas. Which of the following organizational outcomes is most strongly associated with a market culture?

<p>Strong financial performance and profitability. (A)</p> Signup and view all the answers

Compared to hierarchical cultures, which set of organizational cultures is most likely to demonstrate superior performance in operational outcomes, quality, and innovation?

<p>Clan, adhocracy, and market cultures. (C)</p> Signup and view all the answers

Based on the organizational culture study, what is the relationship between organizational culture and financial performance?

<p>Financial performance is not strongly related to organizational culture in general, although market cultures show a slightly positive association. (A)</p> Signup and view all the answers

A company wants to reinforce its commitment to customer service. Which mechanism for changing organizational culture would be most directly related to publicly demonstrating this value to both employees and customers?

<p>Establishing new rites and rituals, such as annual customer service awards ceremonies. (C)</p> Signup and view all the answers

When a new employee joins an organization, they undergo a process of learning the company's values, norms, and expected behaviors. This process is best described as:

<p>Organizational socialization. (C)</p> Signup and view all the answers

After a major product recall crisis, the CEO publicly took responsibility and outlined a series of steps to prevent future issues, emphasizing transparency and accountability. This leadership response primarily serves as a mechanism to change organizational culture through:

<p>Leader reactions to crises. (D)</p> Signup and view all the answers

An organization structured with departments for marketing, sales, finance, and operations, each headed by a specialist in that area, exemplifies which type of organizational design?

<p>Functional Structure (B)</p> Signup and view all the answers

A newly formed tech startup with a handful of employees, where the founder makes all key decisions and there are minimal formal rules, most likely operates under a:

<p>Simple Structure (A)</p> Signup and view all the answers

Organizational culture, structure, and human resource practices are described as being like 'strands in a rope'. What does this analogy primarily suggest about their relationship to organizational strategy?

<p>They are equally important and must be intertwined to effectively support and execute the organizational strategy. (D)</p> Signup and view all the answers

To enhance responsiveness and integration across different departments and product lines, a large multinational corporation is considering moving away from a strictly functional structure. Which of the following organizational redesigns would be most appropriate to achieve this goal?

<p>Implementing a Matrix Structure (B)</p> Signup and view all the answers

Imagine a company that manufactures electronics and operates in North America, Europe, and Asia, with each region having its own production, marketing, and sales teams tailored to local markets. This organizational setup is characteristic of a:

<p>Divisional Structure (C)</p> Signup and view all the answers

Which of the following statements best describes organizational culture according to the provided text?

<p>Shared, often unspoken assumptions that shape how a group perceives, thinks, and reacts to its environment. (D)</p> Signup and view all the answers

What is the primary reason for managers to focus on organizational culture and structure when implementing a strategic plan?

<p>To ensure the strategy aligns with the organization's capabilities and values. (C)</p> Signup and view all the answers

An organization aims to foster greater teamwork and break down barriers between specialized departments to improve project delivery times and innovation. Which organizational design would best support this objective?

<p>Horizontal Structure (B)</p> Signup and view all the answers

Which of the following statements provides the best overview of the relationship between strategy formulation and strategy execution?

<p>Strategy formulation and execution are equally important and interdependent, with execution translating the formulated strategy into tangible results. (C)</p> Signup and view all the answers

Imagine a company with a brilliant strategic plan that fails to deliver the expected results. What is the most likely reason for this failure?

<p>The company's organizational culture and structure were not aligned to support the execution of the strategy. (B)</p> Signup and view all the answers

Human Resource (HR) practices, as described, encompass activities EXCEPT:

<p>Designing the organizational hierarchy and reporting lines. (C)</p> Signup and view all the answers

A company is developing a new strategy that requires significant changes in the way it operates. Which of the following areas should it address first to ensure successful strategy execution?

<p>Assessing and adapting the organizational culture and structure to support the new strategic direction. (A)</p> Signup and view all the answers

An organization that values employee collaboration and internal focus, while prioritizing adaptability and discretion over rigid procedures, most likely operates with which type of culture?

<p>Clan Culture (B)</p> Signup and view all the answers

Which scenario exemplifies the interdependence of organizational culture and structure in executing a strategic plan focused on innovation?

<p>A flat organizational structure with open communication channels and a culture that encourages experimentation and risk-taking. (A)</p> Signup and view all the answers

The Competing Values Framework uses two dimensions to categorize organizational cultures. These dimensions are:

<p>Horizontal focus (internal/external) and vertical orientation (flexibility/stability). (B)</p> Signup and view all the answers

A software startup that thrives on innovation, rapidly adapts to changing market trends, and encourages employee creativity operates primarily with characteristics of which organizational culture type?

<p>Adhocracy Culture (C)</p> Signup and view all the answers

A large, established bank known for its strict regulatory compliance, emphasis on efficiency, and formalized procedures would likely exhibit characteristics of which organizational culture?

<p>Hierarchy Culture (D)</p> Signup and view all the answers

When an organization claims to value teamwork and collaboration (espoused value), but its performance management system solely rewards individual achievements, this discrepancy highlights a gap between:

<p>espoused values and enacted values. (D)</p> Signup and view all the answers

Which of the following scenarios best illustrates the use of symbols to reinforce organizational culture?

<p>The CEO consistently wearing the company's branded apparel at public events. (C)</p> Signup and view all the answers

A fast-food chain implements a new policy where local restaurant managers are empowered to make decisions about local marketing campaigns and community outreach programs. This change indicates a shift toward:

<p>decentralized authority. (D)</p> Signup and view all the answers

To foster innovation and quick adaptation to market changes, a technology company decides to flatten its hierarchy, reduce management layers, and empower self-managed teams. This initiative directly impacts:

<p>the organizational structure by widening the span of control. (C)</p> Signup and view all the answers

A global software company adopts a structure where project teams are formed with members from different functional departments (e.g., marketing, engineering, customer support) to work on specific products. Once the product is launched, the team disbands. This is an example of:

<p>a matrix structure. (A)</p> Signup and view all the answers

An organization changes its reward system to recognize both individual and team accomplishments, accompanied by training programs that emphasize collaboration and communication skills. These actions primarily aim to:

<p>shift the organizational culture. (A)</p> Signup and view all the answers

A manufacturing company decides to outsource its entire IT department to a third-party provider, focusing its internal resources on product development and sales. This structural change is most characteristic of a:

<p>hollow structure. (C)</p> Signup and view all the answers

When a well-established hierarchical organization acquires a small, agile startup known for its innovative culture, which of the following steps is MOST critical to successfully integrate the startup without stifling its creativity?

<p>Allowing the startup to maintain its autonomy and unique culture while aligning on broader strategic goals. (C)</p> Signup and view all the answers

A company initially adopts a functional structure but then decides to pursue a diversification strategy, entering several new and distinct markets. What organizational adaptation is MOST likely required to support this new strategy?

<p>Adopting a divisional structure to allow each business unit to operate with greater autonomy and responsiveness. (C)</p> Signup and view all the answers

An organization with a strong clan culture is implementing a new strategy focused on aggressive market penetration and rapid sales growth. Which change in HR practices would BEST support this strategic shift?

<p>Implementing performance-based compensation and individual incentives to drive competitive behavior. (D)</p> Signup and view all the answers

A tech company with a modular structure is considering expanding into a new international market. Which factor should be MOST carefully evaluated when selecting overseas partners for module production?

<p>The partner's ability to adhere to strict quality standards and delivery schedules. (D)</p> Signup and view all the answers

A virtual organization is created to develop and launch a new mobile app within a six-month window. After the app is successfully launched, what is the MOST likely outcome for this virtual structure?

<p>The virtual organization will be disbanded as the specific market opportunity has been addressed. (D)</p> Signup and view all the answers

XYZ Manufacturing initially operated with a centralized structure and cost-leadership strategy. It now aims to foster innovation and become more responsive to market changes. Which of the following structural changes is MOST appropriate?

<p>Implement a decentralized structure with empowered teams and decision-making at lower levels. (D)</p> Signup and view all the answers

A tech company emphasizes collaboration, open communication, and shared decision-making. Which cultural element would be MOST effective in reinforcing these values?

<p>Designing open office spaces that encourage informal interactions. (B)</p> Signup and view all the answers

A company facing a major ethical scandal wants to rebuild trust and reinforce its commitment to ethical behavior. Which leadership action would be MOST effective in initiating this cultural shift?

<p>Publicly acknowledging the wrongdoing, taking responsibility, and implementing clear ethical guidelines with enforcement mechanisms. (B)</p> Signup and view all the answers

An organization is transitioning from a hierarchical structure to a more team-based, collaborative approach. Which HR practice needs the MOST significant change to support this transition?

<p>Implementing team-based performance evaluations and reward systems. (C)</p> Signup and view all the answers

A company with a strong market culture wants to enhance its innovation capabilities. Which of the following strategies would be MOST effective in achieving this goal?

<p>Creating cross-functional teams and providing resources for experimentation and risk-taking. (B)</p> Signup and view all the answers

A company is experiencing poor employee morale and a lack of engagement. Based on the organizational culture research presented, which type of culture is MOST likely to improve employee attitudes?

<p>Clan culture. (A)</p> Signup and view all the answers

Which of the following organizational changes would MOST directly support a shift towards an adhocracy culture?

<p>Establishing cross-functional teams with decentralized decision-making authority. (B)</p> Signup and view all the answers

A company is attempting to change its culture to be more customer-focused. Which action would provide the MOST DIRECT reinforcement of this new value?

<p>Rewarding employees who demonstrate exceptional customer service and publicly recognizing their achievements. (C)</p> Signup and view all the answers

A company is publicly praised as one of the best places to work. How might an analysis of the organization's culture explain this?

<p>It probably has either clan, adhocracy, and market cultures more than hierarchical ones. (B)</p> Signup and view all the answers

Flashcards

Strategy Execution

The process of putting strategic plans into action. It requires managers to take concrete steps to achieve the goals outlined in the strategy.

Organizational Culture

A key element for successful strategy execution. It involves shaping shared values and beliefs to support the strategic goals.

Organizational Structure

Another key element for successful strategy execution. Defining the formal arrangement of roles, responsibilities, and relationships within an organization to implement strategy.

Human Resources Practices

These are essential for translating strategic goals into workforce behaviors and capabilities.

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Culture & Structure

Culture and structure are fundamental aspects that need careful management to align with planned strategies.

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Delegation

Assigning tasks and responsibilities to subordinates.

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Responsibility

Obligation to perform assigned tasks.

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Authority

The power or right to give orders, make decisions, and enforce obedience.

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Accountability

Being answerable for one's actions.

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Adhocracy Culture

Culture focused on adaptability, creativity, and flexibility.

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Organizational Chart

Formal system of task and reporting relationships that coordinates and motivates organizational members.

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Span of Control

The number of employees a manager can efficiently and effectively supervise.

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Centralized Authority

Authority is concentrated at the top of the organization.

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HR Practices

Activities an organization uses to manage its human capital, like staffing, training, and compensation.

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Clan Culture

An organizational culture that emphasizes employee collaboration and values flexibility, with an internal focus.

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Market Culture

An organizational culture emphasizing competition, results, and stability, driven by external focus.

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Hierarchy Culture

An organizational culture emphasizing control, efficiency, and formalized processes, with an internal focus and stability.

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Horizontal Dimension (Culture)

Inward focus (towards employees) or outward focus (toward customers).

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Hollow Structure

An organization with a central core of key functions that outsources other functions to external vendors.

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Modular Structure

A structure where the firm assembles product 'chunks' or modules provided by outside contractors.

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Virtual Structure

An organization whose members are geographically distant, working via electronic communication; or a temporary company created for a specific market opportunity.

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Strategy Alignment

The culture, structure, and HR practices of an organization should all support the overall strategy.

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Functional Structure

A traditional organizational structure, organizing by what each department does (e.g. Medical, Admin, Outpatient).

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Organizational Symbol

An object, act, quality, or event that conveys meaning to others within an organization.

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Organizational Story

A narrative—true or embellished—repeated to emphasize a particular value.

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Organizational Hero

A person whose accomplishments embody the values of the organization.

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Rites and Rituals

Activities and ceremonies that celebrate important occasions and accomplishments.

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Organizational Socialization

The process by which people learn the values, norms, and required behaviors of an organization.

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Clan Cultures & Attitudes

Employees have more positive work attitudes when working in organizations with clan cultures.

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Clan & Market Cultures: Benefits

Clan and market cultures are more likely to deliver higher customer satisfaction and market share.

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Mechanisms of Culture Change

Mission statements, vision, values, language, slogans, rites, rituals, stories, leader reaction to crises, role modeling, training, physical design, rewards, titles, goals, measurable activities, structure.

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Strategy Implementation

The process of taking action on strategic plans to achieve desired outcomes.

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Culture & Structure Importance

Culture and structure are key aspects that need careful management to align with planned strategies.

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Competing Values Framework

A framework that categorizes organizational cultures based on two dimensions: horizontal (internal/external focus) and vertical (flexibility/stability).

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Organizational Design

Structures of accountability and responsibility to execute strategies.

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Simple Structure

Authority centralized in a single person, flat hierarchy.

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Wide Span of Control

Also known as a flat structure, a wide span of control means more individuals report to a single manager.

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Narrow Span of Control

Also known as a tall structure, characterized by multiple layers of management and a narrower scope of supervision for each manager.

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Enacted Values

The values and norms that are actually exhibited or converted into employee behavior.

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Espoused Values

The stated values and norms that an organization claims to have.

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