Podcast
Questions and Answers
What is one potential disadvantage of increased organizational size?
What is one potential disadvantage of increased organizational size?
- Enhanced decision-making speed
- Improved employee morale
- Increased bureaucratic controls (correct)
- Greater flexibility in adapting to change
Which phase of the organizational life cycle typically involves significant downsizing?
Which phase of the organizational life cycle typically involves significant downsizing?
- Growth Phase
- Decline Phase (correct)
- Maturity Phase
- Introduction Phase
What challenge is often associated with bureaucracy in a changing world?
What challenge is often associated with bureaucracy in a changing world?
- Increased employee autonomy
- Enhanced ability to innovate
- Lower costs due to streamlined processes
- Rigidity in operations (correct)
How does organizational decline typically manifest in businesses?
How does organizational decline typically manifest in businesses?
What is a key factor that differentiates bureaucracy from other forms of organizational control?
What is a key factor that differentiates bureaucracy from other forms of organizational control?
What does it indicate when an organization fails to adapt to changes in the environment?
What does it indicate when an organization fails to adapt to changes in the environment?
Which of the following scenarios best describes vulnerability in small companies?
Which of the following scenarios best describes vulnerability in small companies?
What is a consequence of an organization taking past successes for granted?
What is a consequence of an organization taking past successes for granted?
Which factor is NOT likely to contribute to an organization becoming overly attached to past practices?
Which factor is NOT likely to contribute to an organization becoming overly attached to past practices?
Which condition is likely to increase the vulnerability of a small company?
Which condition is likely to increase the vulnerability of a small company?
Flashcards
Organizational Inertia
Organizational Inertia
When an organization becomes complacent, clings to outdated practices, and fails to adapt to changes in its surroundings.
Inability to Prosper
Inability to Prosper
An inability to thrive and flourish in its environment, due to a lack of adaptability or response to changes.
Vulnerability (for young companies)
Vulnerability (for young companies)
A state of vulnerability faced by young companies that haven't established a strong foundation yet.
Is Bigger Better?
Is Bigger Better?
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Organizational Life Cycle
Organizational Life Cycle
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Bureaucracy
Bureaucracy
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Bureaucracy in a Changing World
Bureaucracy in a Changing World
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Bureaucracy vs Other Forms of Control
Bureaucracy vs Other Forms of Control
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Study Notes
Organization Size, Life Cycle & Decline
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Organization size: Is bigger better?
- Pressure for growth:
- Compete on a global scale
- Invest in new technology
- Control distribution
- Guarantee access to markets
- Stay economically healthy
- Power & increased revenues
- Attractive for quality employees
- Pressure for growth:
-
Organizational Life Cycle
- Large and Small Organizations:
- Large (Economies of scale, global reach, vertical hierarchy, complex, stable market, organization men)
- Small (Responsive, flexible reach, flat structure, simple, niche-finding, entrepreneurs)
- Stages of Life Cycle Development:
- Entrepreneurial Stage.
- Collectivity Stage.
- Formalization Stage
- Elaboration Stage
- Organizational characteristics during life cycle
- Entrepreneurial: small, nonbureaucratic, one-person show, devoted to survival and production of single product, crisis = need for leadership
- Collectivity: growth is rapid, employees are excited, mostly informal, strong leadership (Jeff Bezos example), continued growth is major goal, crisis = need for delegation
- Formalization: entering midlife, bureaucratic characteristics emerge, adds staff, develops complementary products, has a clear hierarchy/division of labor (includes R&D department), internal stability and market expansion, crisis = too much red tape
- Elaboration: large and bureaucratic with extensive control systems, attempts to develop team orientation, top managers are concerned about complete organization, stature and reputation are important, innovation is institutionalized, crisis = need for revitalization
- Large and Small Organizations:
Mergers
- Mergers and their impacts:
- AOL/Time Warner (2001) – $148 billion loss
- Vodafone/Mannesmann (2000) – $299 billion loss
- Pfizer/Warner-Lambert (2000) – $78 billion loss
- General example of mergers resulting in values being created or destroyed.
- Size is not always a strategy (mergers)
Bureaucracy
-
Max Weber's thoughts on bureaucracy:
- Bureaucracy
- Efficiency & rationalization of organizations
-
Bureaucracy is beneficial
- Most efficient organizing system
- Allows organizational activities to be predictable
- Sensible mechanism for supervision & control
-
Bureaucracy has problems
- Problems with bureaucracies in rapidly changing environments need innovative structural and temporary solutions.
- Prevent bureaucratic slow response
- High uncertainty: loosen lines of command, work across departments
-
3 Organizational control strategies
- Bureaucracy (Rules, Standards, Hierarchy, Legitimate Authority)
- Market (Prices, competition, exchange relationship)
- Clan (Tradition, shared values & beliefs, trust)
- Self control - individual values, goals, and standards
Organizational Decline
- Definition of Organizational Decline:
- Substantial, absolute decrease in an organizational resource base over time
- Causes of Organizational Decline:
- Organizational Atrophy, Vulnerability and Environmental decline/competition
- Model of decline stages:
- Blinded, Inaction, Faulty Action, Crisis, Dissolution
- The different stages of decline, their characteristics and how to solve the issue
- Downsizing implementation:
- Communicate more, not less
- Provide assistance to displaced workers
- Help survivors to thrive
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