Organisational Behaviour And Design 3 PDF

 Motivations for Global Expansion Three primary factors motivate companies to expand internationally: 1. Economies of scale - e.g. Through large-volume production, industrial giants were able to achieve the lowest possible cost per unit of production. 2. Economies of scope - Scope...

 Motivations for Global Expansion Three primary factors motivate companies to expand internationally: 1. Economies of scale - e.g. Through large-volume production, industrial giants were able to achieve the lowest possible cost per unit of production. 2. Economies of scope - Scope refers to the number and variety of products and services a company offers, and the markets it operates in. - It increases a company’s market power. 3. Low-cost production factors - e.g. Searching for lower cost of capital, cheap energy and reduced government restrictions. ©2024 Grazia Garlatti Costa  Managing the Stages of International Development ◦ The shift from domestic to global typically occurs through stages of development 1. Stage I: Domestic stage 2. Stage II: International stage 3. Stage III: Multinational stage 4. Stage IV: Global stage ©2024 Grazia Garlatti Costa  Stages of International Development I. Domestic II. International III. Multinational IV. Global Strategic Domestically Export-oriented, Multinational Global orientation oriented multidomestic Stage of Initial foreign Competitive Explosion Global development involvement positioning Domestic International Domestic structure Worldwide structure plus matrix, Structure plus international geographic product export transnational division structure department structure Moderate, Large, Very large, Market potential mostly Whole world multidomestic multinational domestic ©2024 Grazia Garlatti Costa  Cultural intelligence ◦ As companies progress through these development stages, they need cultural intelligence. ◦ Cultural intelligence: ürefers to the ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses. üenables a person to find clues to a culture’s shared understandings and respond to new situations in culturally appropriate ways ©2024 Grazia Garlatti Costa  Global Expansion Through International Strategic Alliances Strategic alliances have developed rapidly as one of the most common ways companies get involved in international operations. These typically include: Ø Licensing – allowing another firm to market your brands. Ø Joint ventures – a separate entity of two or more firms. Joint ventures may be with either customers or competitors. Ø Consortia – groups of independent companies joint together to share skills, resources, costs and assess to one another’s markets. ©2024 Grazia Garlatti Costa  The Global Organizational Challenge even if you are different countries divide you need neede different To montan a product - line ↑ common resolve his Litti cleaningalo international with horizontal an ↑ einkage ©2024 Grazia Garlatti Costa  Challenges of Global Design ◦ Managers face the challenge of achieving the integration and collaboration that is necessary to reap the benefits of economies of scale, economies of scope, and labor and production cost. ◦ Challenges: 1. Increased complexity and differentiation 2. Increased need for coordination 3. Transfer of knowledge and reverse innovation ©2024 Grazia Garlatti Costa  Challenges of Global Design People scattered at different locations around the world sometimes have trouble building trusting relationships. Other reasons include: ü Language barriers, cultural dissimilarities, and geographic distances can prevent managers from spotting the knowledge and opportunities that exist across disparate country units. ü Sometimes managers don’t appreciate the value of organizational integration and want to protect the interests of their own division rather than cooperate with other divisions. ü Divisions sometimes view knowledge and innovation as power and want to hold on to it as a way to gain an influential position within the global firm. ü The “not-invented-here” syndrome makes some managers reluctant to tap into the know-how and expertise of other units. ü Much of an organization’s knowledge is in the minds of employees and cannot easily be written down and shared with other units. ©2024 Grazia Garlatti Costa  Model for Global versus Local Opportunities When organizations venture into the international domain, managers attempt to formulate a coherent GLOBAL STRATEGY that will provide synergy among worldwide operations for the purpose of achieving common organizational goals. ONE DILEMMA they face is choosing whether to emphasize global standardization/integration versus local responsiveness. Managers must decide: ü whether activities should be standardized across countries, or ü whether they want each global affiliate to act autonomously. ©2024 Grazia Garlatti Costa  Model for Global versus Local Opportunities globalization localisation + A Ø Globalization or multidomestic strategy. - Globalization strategy means that products’ design, manufacturing and marketing strategy are standardized throughout the world. It can help an organization reaphacoglihe) economy-of-scale efficiencies. - Multidomestic strategy means that competition is handled in each country T independently. ØOrganizations needs to decide whether their goal is to achieve global integration or national responsiveness. ØGlocalization strategy (both globalization and multidomestic strategies simultaneously) ©2024 Grazia Garlatti Costa  Fitting Organization Structure to International Advantages Glo Two dimension important stra caliz for business teg atio This matrix put toghter y n strategy with If both yellow and organisational design purple are important If you need to produce something that is more - you use this matrix similar and standardise in the world because you If you decide that for have to a reach economy simpliest situation your product is more of scale and mantain cost important to consider of production low you different needs of adopt globalisation sam une interational different countries You division while montaing strategy Domestic structure ©2024 Grazia Garlatti Costa Local responsiveness is important because they feel to be unique and that the company pays attention alo to their need  International division International division § is often used when companies begin to explore international opportunities. § is organized according to geographic interests, as illustrated in figure. § has its own hierarchy to handle business (licensing, joint ventures) in various countries. ©2024 Grazia Garlatti Costa  Global Product Division Structure § Global product division structure means that the product divisions take responsibility for global operations in their specific product area. § It is one of the most commonly used structures in order to achieve global goals. § It is widely used for standardizing production and sales around the globe. § It can encounter problems when product divisions do not work well together. ©2024 Grazia Garlatti Costa  Global Product Division Structure Different global line of product ©2024 Grazia Garlatti Costa Global Geographic Division Structure ◦ The global geographic structure divides the world into geographical regions, with each geographical division reporting to the CEO. ◦ Each division has full control of functional activities within its geographical area. ◦ It’s suitable for companies with mature product lines and stable technologies. ◦ Senior managers may face difficulties resulting from the autonomy of each regional division. ©2024 Grazia Garlatti Costa  Global Geographic Division Structure Different geographical areas with a divisional structure Exchange geographical division is reported to the CEO ©2024 Grazia Garlatti Costa  Global Matrix Structure § Global matrix structure can be used to achieve vertical and horizontal coordination simultaneously. Distance increases complexity. ©2024 Grazia Garlatti Costa  Global Coordination Mechanisms ØGlobal team - Also called transnational teams, these are cross- border work groups made up of multi-skilled, multinational members whose activities span multiple countries. - Intercultural teams and virtual global teams. ØHeadquarters planning - Headquarters take an active role in planning, scheduling and control to keep the global organization working together. ØExpanded coordination roles - A possible way to integrate different aspects of the organization to achieve a strong competitive position. ©2024 Grazia Garlatti Costa  Benefits of Coordination Benefits that result from inter-unit collaboration include the following: ØCost savings ØBetter decision making ØGreater revenues ØIncreased innovation ©2024 Grazia Garlatti Costa The Transnational Model of Organization § The transnational model is an organizational form highly adapted to the character of a globalizing economy. § Structure required in highly complex organizations. § An integrated network linked together to achieve multidimensional goals. § Key characteristics include: 1. Assets and resources that are dispersed worldwide. 2. Structures that are flexible and ever-changing. 3. Subsidiary managers who initiate strategy and innovations that become strategy for the whole organization. 4. Corporate culture, shared vision and management style that guide the organization. ©2024 Grazia Garlatti Costa  · Summary § Managers must design organizations for complex international coordination. § Traditionally four stages of international development: domestic orientation – international orientation – multinational orientation – global orientation. § Organizational structures include international division, geographic structure, product structure and matrix structure. § There a diverse options for specific international strategies. § There are a variety of challenges for global organizations. § Companies operating globally require broad coordination. ©2024 Grazia Garlatti Costa  CHAPTER 8 Design for Manufacturing and Service Technologies Prof. Grazia Garlatti Costa [email protected] ©2024 Grazia Garlatti Costa  Manufacturing and Service Technologies § Technology refers to the work processes, techniques, machines and actions used to transform input into outputs. - Technology influences organizational structure. § An organization’s core technology is the work process that directly relates to the organization’s mission. - Understanding core technology provides insight into how an organization can be structured for efficient performance. § A non-core technology is a work process that is important to the organization but is NOT directly related to its primary mission. car techology minarily is teaching in ©2024 Grazia Garlatti Costa Core work processes of a manufacturing company that is transformation of all stages that are specifically related with the company Core Transformation Process for a Manufacturing Company ©2024 Grazia Garlatti Costa Balance solution between organisational design related to core work processes and strategy and external forces Pressures Affecting Organization Design ©2024 Grazia Garlatti Costa  Core Manufacturing Technology § Woodward’s study: Joan Woodward questioned the idea of universal principles of management § Technical complexity refers to the extent of mechanization of the manufacturing process. - High technical complexity means most of the work is performed by machines. - Low technical complexity means workers play a larger role in the magentwasae production process. the § Woodward’s scale of technical complexity: - Group I: Small-batch and unit production 1960 - Group II: Large-batch and mass production Woodwart was the against with - Group III: Continuous-process production system of solution only 1 different according to Y ©2024 Grazia Garlatti Costa there are core technology ↓ simple processes a automated proce Ima-production) Woodward’s Classification Based on Systems of Production a when in for small Gaftenase onen important heires ↑ ↑ Machine & amtere a e wes production fines autondike cateria di montaggio die finis at - HUMAN PA1t IS limited ↓ to you need lot have a volume of ©2024 Grazia Garlatti Costa  Relationship Between Technical Complexity and Structural Characteristics Technology Unit Mass Continuous Structural Characteristic Production Production Process Number of management levels 3 4 6 Supervisor span of control 23 48 15 Direct/indirect labor ratio 9:1 4:1 1:1 Manager/total personnel ratio Low Medium High Workers’ skill level High Low High Formalized procedures Low High Low Centralization Low High Low Amount of verbal communication High Low High Amount of written communication Low High Low Overall structure Organic Mechanistic Organic ©2024 Grazia Garlatti Costa  Strategy, Technology and Performance § Successful firms have complementary structures and technologies. § Organic and mechanistic management systems. - Successful small-batch and continuous process organizations tended to have more organic structure. - Successful mass-production organizations had comparatively mechanistic structures. § Effectiveness is contingent upon an alignment of strategy, structure, and technology. § Failing to adopt a new technology or failing to realign strategy can lead to poor performance. ©2024 Grazia Garlatti Costa  Contemporary Applications § Computerization has had a massive impact upon continuous production processes. § Two significant contemporary applications of manufacturing technology are: - Smart Factory - Mass customization ©2024 Grazia Garlatti Costa  The Smart Factory and Flexible Manufacturing Systems New manufacturing technologies include advanced robotics, radio-frequency identification (RFID), wireless technology, artificial intelligence (AI), and engineering analysis In a smart factory, computer-guided machines handle many of the routine tasks, and factory plants, suppliers, and customers are digitally connected to one another Smart Factory subcomponents üComputer-aided Design (CAD) üComputer-aided Manufacturing (CAM) üRobots ü3-D Printing (Additive Manufacturing) ©2024 Grazia Garlatti Costa  Mass Customization Smart factories paved the way for mass customization Mass customization refers to using mass-production technology to quickly and cost-effectively assemble individualized goods for customers Products of different sizes, types, and customer requirements freely intermingle on the assembly line Smart factories allow plants to increase both batch size and product flexibility at the same time High-level use of smart systems is referred to as computer-aided craftsmanship ©2024 Grazia Garlatti Costa Performance and Structural Implications Studies suggest that in smart factories, there is: üEfficient machine utilization. üLabor productivity increases. üScrap rates decrease. üIncreased productivity. üIncreased customer satisfaction. Technology alone cannot give organizations the benefits of flexibility, quality, and increased production and customer satisfaction. ©2024 Grazia Garlatti Costa Comparison of Organizational Characteristics (slide 1 of 2) Characteristic Mass Production Smart Factory Structure Span of control Wide Narrow Hierarchical levels Many Few Tasks Routine, repetitive Adaptive, craftlike Specialization High Low Decision making Centralized Decentralized Overall Bureaucratic, mechanistic Self-regulating, organic ©2024 Grazia Garlatti Costa Comparison of Organizational Characteristics (slide 2 of 2) Characteristic Mass Production Smart Factory Human Resources Interactions Stand-alone Teamwork Training Narrow, one time Broad, frequent Cognitive, social; solve Expertise Manual, technical problems Interorganizational Customer demand Stable Changing Suppliers Many, arm’s length Few, close relationships ©2024 Grazia Garlatti Costa  Surviving Extremely Complex Technologies Complex systems can overwhelm a company’s ability to effectively and safely manage them High reliability organizations (HROs) have developed techniques to manage highly complex and potentially hazardous technologies in a safe and reliable manner Five qualities characterize a high reliability organization: 1. Preoccupation with failure 2. Reluctance to simplify observations 3. Sensitivity to operations 4. Deference to expertise 5. Commitment to resilience ©2024 Grazia Garlatti Costa  Five Characteristics of the High Reliability Organization Please reaction ©2024 Grazia Garlatti Costa  Core Service Technology § Service technologies are different from manufacturing technologies and require different organizational design § Production and provision of services: 1. Intangible output. 2. Simultaneous production and consumption. 3. Labor and knowledge are intensive. 4. Direct interaction between customer and employee. 5. Quality is perceived. 6. Human element very important. 7. Rapid response time. 8. Site selection is very important. § New directions in services. ©2024 Grazia Garlatti Costa Manufacturing vs Service Technologies ©2024 Grazia Garlatti Costa  Trend Toward Customized Services Service firms have always tended toward providing customized output. Customer expectations of what constitutes good service are rising. These expectations have required service firms to become more efficient and to cut costs without sacrificing quality. ©2024 Grazia Garlatti Costa  Designing the Service Organization Boundary roles are used less in service firms than in manufacturing firms A service firm’s greatest economies are achieved through disaggregation into small units that are located close to customers Skills of technical core employees typically need to be higher Employees need knowledge, awareness, social and interpersonal skills Decision making is often decentralized ©2024 Grazia Garlatti Costa  Structural Characteristics of Service Organizations versus Product Organizations Service Product Structural Characteristic 1. Separate boundary roles Few Many 2. Geographical dispersion Much Little 3. Decision making Decentralized Centralized 4. Formalization Lower Higher Human resources 1. Employee skill level Higher Lower 2. Skill emphasis Interpersonal Technical ©2024 Grazia Garlatti Costa  Non-Core Departmental Technology Ø Departments not within the technical core Ø Charles Perrow’s analytical framework Perrow specified two dimensions of departmental activities that were relevant to organization structure and processes: 1. Variety - Task variety refers to the frequency of unexpected and novel events in the work (process of input transformation). 2. Analyzability - This dimension of technology concerns the ability to apply standard procedures. ©2024 Grazia Garlatti Costa  Categories of Departmental Technology ◦ The two dimensions of departmental technology are variety and analyzability form the basis for four departmental technology categories: 1. Routine technologies 2. Craft technologies 3. Engineering technologies 4. Nonroutine technologies ◦ Variety and analyzability can be also combined into a single dimension called routine versus nonroutine technology ©2024 Grazia Garlatti Costa  Framework for Department Technologies A lot of task is provided by experience Most difficult Craft made small batch situation Human effort is very important expect all in case you have to substitute a worker typer example research For all procedures and technics they Little task variety easy have to handle a procedures of employees. lot of problems Routine technology ex environment assembly line challenge organisation Ex engineering activities ©2024 Grazia Garlatti Costa Department Technology to Structural and Management Characteristics ©2024 Grazia Garlatti Costa Workflow Interdependence among Departments § The final characteristic of technology that influences organization design is called interdependence. § Interdependence means the extent to which departments depend on each other for resources or materials to accomplish their tasks. - Low interdependence means that departments can do their work independently. - High interdependence means departments depend on each other. § Thompson’s three types of interdependence: 1. Pooled interdependence 2. Sequential interdependence 3. Reciprocal interdependence ©2024 Grazia Garlatti Costa Workflow Interdependence among Departments ØJames Thompson’s three types of interdependence: 1. Pooled interdependence: Low level of interdependence (departments work independently) 2. Sequential interdependence: High level of interdependence (department A must perform correctly so that department B performs correctly) 3. Reciprocal interdependence: Highest level of interdependence (department A’s output is the input to department B, and department B’s output is the input back again to department A) ©2024 Grazia Garlatti Costa Thompson’s classification of Interdependence and Management Implications Level of communication And priority of locating department close togheter(organisation can put department all around the world or in different buildings this is possible with pooled relationship but not in a part with high communication ©2024 Grazia Garlatti Costa Structural Priority and Implications § Reciprocal interdependence should receive first priority. § Reciprocal activities should be grouped together. § Poor coordination will cause poor performance. § Organizations should be designed to address interdependence. § Various new technologies can help permit departmental interdependence. ©2024 Grazia Garlatti Costa  Summary § We look at service and manufacturing technologies and how technology is related to organization structure. § Key research notes that technology and structure can be co- aligned. § Service technologies differ in a systematic way from manufacturing technologies. § Understanding the variety and analyzability of a technology helps to achieve effective organization design. § Interdependence among departments dictates the amount of communication and coordination required in design. § New flexible manufacturing systems are having a significant impact upon organization design. ©2024 Grazia Garlatti Costa  CHAPTER 9 Design for Digital Organizations and Big Data Analytics Prof. Grazia Garlatti Costa [email protected] ©2024 Grazia Garlatti Costa 1  The Digital Information Explosion ◦ From traditional information media to digital media ◦ Digital media means that information or data can be both created and consumed by machines, and thereby be generated, modified and distributed on digital electronic devices ◦ Initially, in the evolution of IT, mainframe computer systems in organizations were applied to operations ◦ These systems became transaction processing systems (TPSs), which automate the organization’s routine, day- to-day business transactions ©2024 Grazia Garlatti Costa 5 Evolution of Information Technology ©2024 Grazia Garlatti Costa 6  The Digital Information Explosion ◦ Mainframes also enabled the subsequent use of: ◦ Data warehousing (use of huge databases) ◦ Internal business intelligence (data mining) ◦ Mini-computers and connected desktops ◦ Mobile Internet has enabled big data analytics—new sensing technologies and processes for gathering, searching and analyzing massive, complex sets of data ◦ Most recent jump in the information explosion is to the “Internet of Things”: every “thing” can have a chip inserted to communicate data to other devices ©2024 Grazia Garlatti Costa 7 Pipes versus Platforms: A New Organization Form ◦ Traditional organizations, or “pipe” firms, acquire resources at one end of the pipe, make stuff within the pipe, and push the result out the other end for sale to customers ◦ In platform-based organizations, producers and consumers are connected via digital technology ◦ Platforms harness and create large networks of users (consumers) and resources (producers) that can be accessed on demand ◦ A platform-based business is a complete organizational form ©2024 Grazia Garlatti Costa 8  all country wher is not legal in since is rival ofTaxi Platform-Based Digital Organization Ecosystem Platform business change way of doing business Ex buy on shops or online for customer is the same. This is is not applied maybe with luxury goods since there is an experience or maybe customers want to buy online since some products cost less ©2024 Grazia Garlatti Costa 9  e when Two Types of Platform-Based Organizations Most platform-based organizational forms are one of two types: ØExchange platforms facilitate one-to-one (1:1) interactions among members thenswitch to this ◦ Example: Uber, Ebay ØMaker platforms facilitate one-to-many (1:1,000s) interactions among members started Amazon here ◦ Example: YouTube, app-store Both provide a digital connection among producers and consumers, and the business is anchored in digital transactions rather than the exchange of physical products or services based in buildings and equipment. ©2024 Grazia Garlatti Costa 10  Foundational Assumptions Pipe Firms Platform-Based Organizations ◦ Pipe Assumption 1: Organizations create ◦ Platform Assumption 1: Capital assets can competitive advantage through be owned by the connected producers increasing size of capital assets, including and consumers of the platform; the buildings and manufacturing facilities platform can minimize rather than add ◦ Pipe Assumption 2: Organizations act as assets information processing structures or ◦ Platform Assumption 2: Information in the hierarchies digital era travels extremely fast and widely ◦ Pipe Assumption 3: Managers are ◦ Platform Assumption 3: Algorithmic systems promoted into positions of increasing embedded in the platform software are responsibility as they gain experience and more consistent, impartial, and faster for show talent for making bigger decisions making decisions than are humans in many for the company areas ©2024 Grazia Garlatti Costa 11  Platform Design Recommendations ◦ While there are no hard rules for this organizational form, recommendations for effectively designing a platform-based organization include: 1. Envisioning a constructive culture 2. Investing in digital talent 3. Promoting soft skills and team building ◦ ATTRACTION AND RETENTION PROBLEMS! ©2024 Grazia Garlatti Costa 12  Big Data is Really Big Organisation now are able to work with more data Important to have a lot this change also of data but also to expectation and tastes of manage them customer ©2024 Grazia Garlatti Costa 13  Big Data Analytics and Requirements ◦ Big data is any massive data set that exceeds the boundaries and conventional processing capabilities of traditional IT ◦ Big data analytics refers to the process of examining large data sets to uncover hidden patterns, correlations, and other useful information and make better decisions. ◦ The five elements of big data are: 1. Volume 2. Use all data 3. Use messy data 4. Adopt new mindset 5. Organization structure ©2024 Grazia Garlatti Costa 14  Elements of Big Data Function of find -> importance with lot a Canelahom & of datas "team" > find ways to and te could - them Eee generational categorized Conflicts ©2024 Grazia Garlatti Costa 15  Big Data and Organization Structure ◦ There is no “one best way” to organize big data activity within an enterprise ◦ Various structural options may work, depending on the size and type of organization: 1. Outsourcing (including the use of data intermediaries) 2. Centralized 3. Balanced (or hybrid) design 4. Decentralized ©2024 Grazia Garlatti Costa 16  Alternative Structures for Organizing external Big Data outsources rusing proces Analytics di v i s i o n are ① gmisation loated alised busine ! L When cortoted this 1 in you analytics have somove outside That provide you the sewile in which there Unit i # are maina and take west to devision importanttree proces ↑ touch in in-lose unit get iffent of different ~ for manage expert delision This angentice difficult for fast sacision ©2024 Grazia Garlatti Costa 17  Artificial Intelligence ◦ Computer-based artificial intelligence (AI) has the ability to make decisions equal to or better than human beings ◦ Artificial Intelligence (AI) stands at the forefront of modern technological innovation, embodying the pursuit of creating intelligent systems capable of simulating human cognitive functions ◦ Companies have adopted AI in core manufacturing technologies and in aspects of organization management, such as accounting, customer service, and HR ◦ Recent years have witnessed an exponential surge in the application of AI across various domains ◦ As AI permeates diverse facets of daily life, ethical considerations (e.g., transparency, accountability, and data privacy) have gained paramount importance. ©2024 Grazia Garlatti Costa 18 New Information Technologies Used in Organizations ©2024 Grazia Garlatti Costa 24  AI Implications for Organization Design ◦ Due to the rapid growth of artificial intelligence applications, organizations should make two adjustments to their design: 1. Add a chief artificial intelligence officer (CAIO) 2. Decentralize authority to employees doing nonroutine work ©2024 Grazia Garlatti Costa 26  Digital Impact on Organization Design ◦ Implications of the advances in digital IT for organization design are: 1. Smaller organizations 2. Decentralized organization structures 3. Improved horizontal coordination and collaboration 4. Enhanced network structures ©2024 Grazia Garlatti Costa 32 ezl/10 This nine building blocks describe customer,target,offering,infrastructural aspect and finances For whom are we creating value? Who are our most important customers? Define the different group of people or organisation an enterprise aims to reach and serve Customer seg strategies: demographic, geographic, behavioural, technological, psychographic, firmograpich, needs based,value-based Different type of customers segment Mass market- one product for everyone Niche market- target a specific customer segment Segmented market- distinct valuable position and serve used targeting different customer segment Diversified- one organisation that offer different customer segments ex amazon Multi-sided platforms- the business model relies on different areas that are 3 brands of toothpaste reflecting 3 main segmentation types Mass-Supermarket toothpaste Niche-A toothpaste used for whitening your teeth like Colgate, sensodyne for gengive elmex Segmented -Marvis What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? Describes the bundle of products and services that create value for a specific customer segment This values recall the porter differentiation strategies Value proposition canvas it is part of the BMC aimed at helping companies Gains(the benefits and positive outcome that customers seek How a company communicate with customer segments to deliver a value proposition Describes how a company communicates with and reaches its customers segments to deliver a value proposition After Sales What type of relationship does each of our customer segments expect us to establish and maintain with them? Which ones have we established? How costly are they? Describes the type of relationship a company establishes with specific customer segment What values are our customers willing to pay? For what do they currently pay? How are they currently paying and how would they prefer to pay? Represent the cash a company generates from each customer segments &