Org. Theory and Design: Chapter 11 (Matching)

Birth = Associated with the greatest chance of failure Growth = Stage of development and expansion Decline = Stage of decreasing effectiveness and productivity Death = Final stage of the organizational life cycle

Liability of newness = Dangers associated with being the first to operate in a new environment Fragile organization = Lacks a formal structure for reliability and stability Flexible and responsive structure = Allows for adaptation and continual improvement of routines Hostile environmental conditions = Conditions that may be unfavorable to a new organization

Entrepreneurs = People who recognize and take advantage of opportunities to create value Organizational birth = Stage associated with the greatest chance of failure Value-creation processes = Processes that give an organization reliability and stability Liability of newness = Dangers associated with being the first to operate in a new environment

High failure rate = Due to liability of newness and lack of formal structure Flexibility and responsiveness = Allows for adaptation and continual improvement Fragility of new organizations = Lack of reliability and stability in value-creation processes Hostile environment = Poses dangers to new organizations

Birth = Different rates of passing through this stage Growth = Varied rates of development and expansion Decline = Different levels of decreasing effectiveness and productivity Death = Varied occurrences in different organizations

Birth = Some organizations may not experience this stage at all Growth = Some organizations may experience rapid or slow growth Decline = Some organizations may not experience this stage at all Death = Some organizations may not reach this final stage

R-strategy = Early entry into a new environment K-strategy = Late entry into an environment, after other organizations have tested the water Specialist strategy = Concentrating skills to pursue a narrow range of resources in a single niche Generalist strategy = Spreading skills thinly to compete for a broad range of resources in many niches

Coercive isomorphism = Organizations adopting certain values and norms due to pressure from other organizations or society Mimetic isomorphism = Intentional imitation and copying of successful organizations to increase legitimacy Normative isomorphism = Organizations indirectly adopting the norms and values of other organizations in the environment over time Innovative isomorphism = Developing new norms and values that differentiate organizations from others in the environment

Value-creation stage = Developing skills and competences to acquire additional resources Legitimacy stage = Gaining acceptance, reliability, and accountability in the eyes of stakeholders Isomorphism stage = Process by which organizations become more alike or similar over time Innovative stage = Creating new norms and values that differentiate the organization from others in the environment

Stage 1: Growth through creativity = Crisis of leadership Stage 2: Growth through direction = Crisis of autonomy Stage 3: Growth through delegation = Crisis of control Stage 4: Growth through coordination = Crisis of red tape

Stage 1: Blinded = Unable to recognize internal or external forces and problems that threaten long-term survival Stage 2: Inaction = Failure to take prompt action to reverse the decline Stage 3: Faulty action = Taking actions that are not effective in reversing the decline Stage 4: Crisis = Reaching a critical point of decline

Risk aversion = Unwillingness to bear uncertainty associated with entrepreneurial activities Desire to maximize rewards = Managers' focus on strategies that increase organizational size, even if it reduces future profitability and effectiveness Overly bureaucratic culture = Managers limiting the autonomy of their subordinates to protect their positions Environmental changes = Changes affecting an organization's ability to obtain scarce resources

Growth through creativity = Developing skills to introduce new products for new market niches Growth through direction = Recruitment of a strong top-management team to lead the organization Growth through delegation = Delegating authority to lower-level managers in all functions and divisions Growth through coordination = Finding the right balance between centralized and decentralized control

Profitability = Measures how well an organization uses its resources to create goods and services sold at profitable prices Organizational inertia = Forces inside an organization that resist change Environmental changes = Changes affecting an organization's ability to obtain scarce resources Effectiveness and profitability = Understanding the difference between making a profit and being profitable

Stage 1: Remedial action = Taking immediate action to reverse the decline Stage 2: Inaction = Top managers make little attempt to correct problems despite clear signs of declining performance Stage 3: Faulty action = Managers fail to halt decline and problems continue despite corrective action Stage 4: Crisis = Only radical top-down changes can stop rapid decline and increase chances of survival

Stage 2: Inaction = Failure to correct problems despite clear signs of deteriorating performance Stage 3: Faulty action = Problems continue to multiply despite corrective action Stage 4: Crisis = Organizational strategy and structure need radical changes to stop rapid decline and increase chances of survival Stage 5: Dissolution = Decline becomes irreversible and the organization loses support of stakeholders

Stage 1: Remedial action = Prompt wide-ranging action by managers is vital to reverse the decline Stage 2: Inaction = Downsizing or scaling back operations may be required to reverse the decline Stage 3: Faulty action = Managers need to overcome inertia and adapt to new conditions in the environment Stage 4: Crisis = Only a new top-management team can turn a company around at this stage

Stage 2: Inaction = Managers fear that radical change may threaten the way the organization operates and put it at risk Stage 3: Faulty action = Problems continue to multiply despite corrective action and managers fear radical change may threaten the organization Stage 4: Crisis = An organization in this stage has reached a critical point in its history, and only radical changes can stop rapid decline Stage 5: Dissolution = The organization loses support of stakeholders, and its access to resources shrivels as its reputation and markets disappear