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What is an organization?
Organizations are social entities that are goal directed, deliberately structured and coordinated activity systems linked to the external environment.
What are the two types of organizations based on their relationship with the external environment?
Organization is both a social entity and a system.
True
Structural dimensions describe the internal features of the organization, while ______ dimensions describe both internal and external factors.
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Which of the following is a key factor in structural dimensions of an organization?
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What is the purpose of an organization chart (organigram)?
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Human Resource Management involves making decisions on resources and aligning them with the organization's strategy.
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Define 'Culture' in the context of an organization.
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________ problems have the highest level of uncertainty and are difficult to forecast or face.
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What is the purpose of Request for Proposals (RFPs)?
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What are the types of sourcing mentioned in the text?
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In Total Outsourcing, organizations rely on multiple suppliers for different services.
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The ____________ must be maintained in-house according to the text.
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Match the organizational tool with its purpose:
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What is insourcing?
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What is the purpose of the organization design?
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The external environment is considered a contingency factor in organization design.
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______ is the extent to which goals are realized within an organization.
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Match the following strategy with its description:
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What are the four types of strategic behavior according to Miles and Snow's Strategy Typology?
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What is the main focus of a company following the Defender strategic behavior?
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A Prospector organization typically values innovation, risk-taking, and creativity.
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In an Analyzer strategy, the organization tries to balance efficiency and ________.
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What is the Competing Values Model used for?
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Which sectors are part of the task environment of an organization? (Select all that apply)
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Organizations cannot choose their general environment.
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_________ uncertainty refers to factors that an organization deals with regularly on a day-to-day basis.
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What is the purpose of boundary-spanning roles within an organization?
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What is the main purpose of differentiation in organizational departments?
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In a mechanistic organizational form, centralization is supposed to be high.
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What kind of environment is suitable for implementing an organic organizational form?
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_______ firms can be properly implemented in unstable environments with rapidly changing conditions.
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Match the following strategies to reduce dependence on external resources:
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In the Entrepreneurial Stage, what are the fundamental functions that need emphasis?
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What is the primary need when facing a crisis in the organization?
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Why is delegation important in the Collectivity Stage? Select the correct option.
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In the Formalization Stage, the organization invests in internal systems, including codified internal systems for the recruitment, selection, promotion, and monitoring of ______ resources.
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What is the importance of studying organizational culture?
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What are the two different types of organizational culture mentioned in the text?
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Adaptability culture, represented by the color ______, focuses on investing in the ability to detect, interpret, and translate signals from the environment into new responses.
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Mission culture is characterized by an internal focus and high level of specialization.
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Match the following organizational culture types with their primary characteristics:
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Study Notes
What is an Organization?
- An organization is a social entity that is goal-directed and deliberately structured and coordinated activity system.
- It is linked to the external environment, and managers deliberately structure and coordinate organizational resources to achieve the organization's purpose.
Key Features of an Organization
- An organization is a system composed of two forms: formal (human resources) and informal (human behavior).
- There are different types of goals: individual, group/team, and corporate goals.
- Organizations exist to achieve complex goals that individuals cannot achieve on their own.
- They produce goods and services efficiently, facilitate innovation, and adapt to and influence the environment.
Organization as an Open System
- An open system interacts with the external environment, and boundaries exist to delimit the organization from the environment.
- The organization is a consumer and exporter of resources, and decision-makers must find a structure that permits interaction with the external environment.
Mintzberg's Five Subsystems
- Top Management: responsible for defining targets and strategies.
- Middle Management: responsible for translating top management's instructions to other parts of the organization.
- Technical Core: responsible for transforming raw materials into products and services.
- Technical Support Staff: responsible for scanning the environment for problems and opportunities.
- Administrative Support Staff: responsible for the smooth operation of the organization.
Structural and Contextual Dimensions
- Structural Dimensions:
- Formalization: the degree to which organizational tasks are standardized and written down.
- Specialization: the degree to which tasks are subdivided into different and separated jobs.
- Hierarchy of Authority: who reports to whom and the span of control.
- Complexity: the number of variables composing the system.
- Centralization: the hierarchical level of the organization responsible for making strategic decisions.
- Contextual Dimensions:
- Size: the number of employees composing the organization.
- Organizational Technology: the tools, techniques, and actions used to transform inputs into outputs.
- Environment: the external factors that affect the organization, including the general environment and task environment.
- Goals and Strategy: the plan of action to achieve defined goals.
Uncertainty and Problem-Solving
- Uncertainty is a crucial problem for organizations, and managers must deal with structured, semi-structured, and unstructured problems.
Organization Chart and Designing Boundaries
- The organization chart represents the formal structure of the organization, but does not capture the informal structure.
- Designing boundaries involves defining the system's limits and considering internalization, externalization, and outsourcing options.
Human Resource Management
- Human Resource Management is about aligning the strategy with human resource decisions, such as hiring, training, and rewarding employees.
- The HR director's duties include strategic and operative decisions about human resources.### Outsourcing Phases
- Preliminary phases: internal analysis, evaluation of criticalities/problems, and selection of activities to be outsourced
- Request for Proposals (RFPs): a synthetic report of the organization's wealth status, useful for presentation to external providers
- Meeting with potential suppliers, discussion, and selection of the best candidates
- Definition of the relationship with the supplier, including withdrawal clauses and collaborative relationship
- Signing of the outsourcing agreement, including costs and management of the relationship
Cost Containment
- Costs associated with outsourcing: fee, indirect costs, and management of the relationship
- Cost containment is not always true; risks and benefits must be considered
Strategic Reasons
- Reasons for outsourcing: focus on core business, access to world-class capabilities, and reduction of costs
- Benefits of outsourcing: cost savings, improved quality, and increased efficiency
Problems with Outsourcing
- Reduction of autonomy: dependence on external provider increases uncertainty
- Loss of control of critical variables: reliance on external provider can lead to loss of control
- Risk of cost underestimation: need to consider all phases' costs, including indirect ones
- Incorrect evaluation of timing: period of time between identifying technicality and signing the contract
- Possibility of receiving poor-quality service: need to establish a Service Level Agreement (SLA)
- Possibility of running into an irreversible process: need to consider exit barriers and withdrawal clauses
Contract Monitor
- Responsible for benchmarking activities to check the quality of the service received
- Ensures the Service Level Agreement (SLA) is respected
Sourcing
- Types of sourcing: total/global outsourcing, multiple-supplier sourcing, and insourcing
- Total/global outsourcing: long-term contract with a single supplier, 1-to-1 relationship
- Multiple-supplier sourcing: multiple suppliers for different activities and services, 1-to-many relationship
- Insourcing: keeping the function/organizational unit in-house, closely connected to the core business
Total Outsourcing
- Long-term contract with a single supplier
- 1-to-1 relationship, mutual, and collaborative
- In-house retention of strategic control: maintaining in-house monitoring activities
Multiple-Supplier Sourcing
- Multiple suppliers for different activities and services
- 1-to-many relationship, with a single out-source
- Coordination costs: adding to the monitoring costs
- Standardization and coordination of operations: essential for achieving a common goal
Contractual Relationship
- Formal part: written contract between the out-sourcee and outsourcers
- Informal part: exchange of information and knowledge between vendors
- Polymorphism: both formal and informal structures
Risks and Tools
- Risks: inaccurate agreements, bad contracts, and wrong outsourcing partners
- Tools to mitigate risks: retention of control, governance model, allocation of services, value for money mechanism, and standard/codified processes
Insourcing
- When the function/organizational unit is closely connected to the core business
- When in-house skills are sufficient to deal with the problem
- When the market cannot provide the required competencies
Organization Design
- Creation of roles, processes, and structures to ensure the organization reaches its goals
- Definition of mission, operative goals, and strategy
- Interrelationship between strategy, organization design, and effectiveness
- Role of top management: fundamental in centralized organizations
- External environment: contingency factor, important for defining the organization's direction
- Internal analysis: awareness of the organization's strengths and weaknesses, leadership, and past performances### Organizational Design and Strategy
- There is a double exchange of information between strategic intent and organizational design.
- Organizational design is about defining the structural form, which can be oriented towards learning/human resources or efficiency.
Elements of Organizational Design
- Definition of structural form
- Information and control system
- Communication and interdependencies
- Human resource management
- Organizational culture
- Inter-organizational linkages
Effectiveness Outcome
- Effectiveness is the extent to which goals are realized.
- Performance management is essential to measure effectiveness.
- Feedback is crucial to influence the internal situation.
Strategic Intent
- The strategic intent is the mission of the organization, which is defined by top managers.
- The mission conveys the organization's vision, shared values, and beliefs.
- Operative goals are specific, measurable, and linked to short-term goals.
Types of Operative Goals
- Overall performance: profitability, growth, and output volume.
- Resources: acquisition of needed material and financial resources.
- Market and market shares: growth or reduction of market shares.
- Employee development: training, promotions, and health and safety.
- Innovation and change: number of products made using acquired resources.
Strategy
- Strategy is a plan for interacting with the competitive external environment.
- Managers must select specific strategy design to achieve organizational goals.
- Models exist to aid in formulating strategy, such as Porter's Competitive Strategy.
Porter's Competitive Strategy
- Differentiation strategy: distinguishing products or services from others in the industry.
- Low-cost leadership strategy: increasing market shares by keeping costs low compared to competitors.
Miles and Snows Strategy Typology
- Prospectors: learning-oriented, flexible, and decentralized, with a focus on innovation and risk-taking.
- Defenders: efficiency-oriented, centralized, and focused on internal control and stability.
- Analyzers: hybrid, balancing efficiency and learning, with a focus on maintaining traditional customers and reaching new ones.
- Reactors: responding to the environment, threats, and opportunities in a customized way.
The Organizational Design
- The strategy and design of the organization mutually influence each other.
- Managers must design the organization to support the firm's competitive strategy.
Mechanistic and Organic Design
- Mechanistic design: centralized, formalized, and specialized, with a focus on efficiency and control.
- Organic design: decentralized, empowered, and flexible, with a focus on innovation and learning.
Contingency Factors
- Strategy
- Environment
- Technology
- Size/life cycle
- Culture
- Dimension
Effectiveness
- Effectiveness is a broad concept, evaluating the extent to which multiple goals are attained.
- Efficiency is a narrow concept, referring to the internal workings of the organization.
- Effectiveness approaches:
- Goals approach: focuses on the output side of the organization.
- Resource-based approach: focuses on the ability to obtain resources from the environment.
- Internal process approach: focuses on the internal organization of the system.
- Strategic constituents approach: relies on the satisfaction of internal-external stakeholders.
Integrated Effectiveness Model
- Combines different perspectives to overcome the limitations of the other approaches.
- Demonstrates how different perspectives can exist inside the same organization.
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Description
This quiz covers the basics of organizational theory, including the concept of uncertainty and its impact on organizations, polymorphism, and the multi-contingent approach. It also explores the contextual dimension of organizational design.
