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1. Organizations exist because of their ability to create value and acceptable outcomes for stakeholders. Describe and explain how organizations create value and influence stakeholders? What is the role of in this process?
Many managers have distinguished themselves by tightly managing their operations, focusing heavily on building in operational efficiencies, while always maintaining a close watch on their budgets. Often they will do whatever it takes to keep costs down while maintaining good service to their customers. Innovation and improved performance come from the investments of managers who are always focused on reinvesting in their organization. In this process problems are identified and solved, defects are detected and fixed and merging trends are pinpointed along with potential opportunities. Investments should be made in four areas: (1) develop your talent through continuous training and development, (2) pay and treat your people well. If you want the best and the brightest, you have to treat them as such, (3) invest in performance management systems and (4) invest in recruitment initiatives.
A stakeholder in any particular organization is any party that has an interest in the success and ongoing operation of an organization such as employees, directors, shareholders, regulators and customers. An organization can influence the stakeholders by clearly defining the tools and resources needed to advance into the future and produce more profits. When the stakeholders are shown that their participation and support are needed for the advancement of the company then it's easier to get them to move and take action. The entrepreneur is responsible for coming up with new ideas and creative strategies to keep the business competitive. These individuals are risk takers and use their skills to convince the stakeholders that taking the risk will yield great rewards.
2. What is the relationship among organizational theory, design, change, and organizational structure and culture?
Organizational theory is the study of organizational designs and organizational structures, relationship of organizations with their external environment, and the behavior of managers and technocrats within organizations. It suggests ways in which an organization can cope with rapid change. Organizational design begins with a strategy setting decision guidelines and from this members will take the right course of action. Strategy unifies the intent of the organization and focuses members toward actions designed to accomplish desired outcomes. Organizational change refers to actions that are taken or actions that are not taken in order to solve pressing problems. The choices made by management will either propel the company forward or cause the company to fall back.
Organization structure defines the formal relationships among people and specifies both their roles and their responsibilities. Organizational culture is defined as the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs (artifacts) of organization members and their behaviors. Members of an organization soon come to sense the particular culture of an organization. Corporate culture can be looked at as a system with inputs and feedback. Organizational theory, design, change, structure and culture are all building blocks that allow an organization to thrive and grow, if the concepts are used properly, the members are alert and management is not afraid to take chances in order to excel. 3. Transaction cost theory argues that the goal of organizations is to minimize the costs of exchanging resources in the environment and the costs of managing exchanges inside the organization. What do organizations consider when trying to choose interorganizational strategies in order to minimize transaction costs and bureaucratic costs?
Transactions costs are defined as the costs of negotiating, monitoring, and governing exchanges between people. Environmental uncertainty and bounded rationality are sources of transaction costs. Bounded rationality refers to the limited ability people have to process information. Opportunism and small numbers attempt to exploit forces or stakeholders. Specific assets which are investment that create value in one particular exchange relationship but have no value in any others. In order to minimize transaction costs using interorganizational strategies two things are considered: (1) an emphasis on single-party cost minimization, (2) an emphasis on the structural features of interorganizational exchange, (3) organizations are exchanging non-specific goods and services, (4) uncertainty is low and (5) there are many possible exchange partners. In the case of bureaucratic costs which are internal transaction costs, bringing transactions inside the organization minimizes but does not eliminate the costs of managing transactions. Managers can weigh the savings in transaction costs of particular linkage mechanisms against the bureaucratic costs. It's important to locate the sources of transaction costs that may affect an exchange relationship and decide how thigh the transaction costs are likely to be and choose the linkage mechanism that gives the most transaction cost savings at the lowest price.
4. Why does differentiation occur in an organization? Distinguish between vertical and horizontal differentiation.
Differentiation is the result of efforts to make a product or brand stand out as a provider of unique value to customers in comparison with its competitors. The name of the game is making money and those that want to keep doing that must change and match the wants and desires of the customers. It's also a way to break into new markets with new profit margins and to gain additional new customers . If companies are not able to go head on with other companies in their respective industries it might be possible to challenge companies and products from other industries. Even loyal customers need feel as thought the company appreciates them so advancements or augmentations of products and brands are required. Vertical differentiation occurs in a market where the several goods that are present can be ordered according to their objective quality from the highest to the lowest. It's possible to say in this case that one good is "better" than another. When products are different according to features that can't be ordered in an objective way, a horizontal differentiation emerges in the market. Horizontal differentiation can be linked to differentiation in colours (different colour version for the same good), in styles (e.g. modern / antique), in tastes. 5. Several factors and behaviors can shape an organization hierarchy. How do centralization, standardization, and horizontal differentiation affect the shape of the organization? In what ways can the informal organization and the norms and values of its culture affect the shape of an organization?
Centralized organizations are those in which most of the decision making occurs by a few people at the top of the hierarchy. This typically creates a top-down management structure, in which top-level managers strongly control the direction of the workplace through their decisions and supervision. Conversely, an organization with a decentralized structure allows greater decision-making and authority at lower organizational levels. Highly decentralized companies may have units that operate nearly independently of one another. Standards are a set of guidelines that define how an organization should behave. For instance the employees should show respects to their employer regardless of the type of organizational hierarchy. The questions asked of the managers should be clear and to the point because their time is valuable and limited. In horizontal differentiated organizations the type of hierarchy in place is the same however certain rules withing that hierarchy may change.
For instance there may be three managers and then the main manager and the employees must follow the chain of command. The rules may be amended so that the employees only go through two of the three managers or by-passes them altogether in order to get to the main manager. There may be some confusion at first however the employees may find the process faster. 6. Why is differentiation necessary to build a formal organizational structure? Is differentiation limited to large organizations? How is the concept of span of control related to both integration and differentiation?
Formal structures include defined positions of each member in the organization. A dimension of differentiation is any criterion on the basis of which the members of an organization are formally divided into positions, as illustrated by the division of labor; or into ranks, notably managerial levels; or into subunits, such as local branches, headquarters divisions, or sections within branches or divisions. A structural component is either a distinct official status or a subunit in the organization. Differentiation refers specifically to the number of structural components that are formally distinguished in terms of any one criterion. Diversity brings news ideas and helps organizations to improve, if the current positions in the organization are never changed up by new people then the organization will become stagnant and eventually fail. Differentiation is not only for large organizations it's for any organization with a structure that requires diversity to continue functioning. Span of control refers to the number of subordinates or employes that a manager or supervisor can effectively handle. It's origin comes from the military but you will find this term commonly used in business. Integration is combining while differentiation is defined as making something stand out, in either case the number of employees that responsible to make the company excel are required to report to a manager. Depending on location or other factors the manager may not have direct control over the employees so in that case a form of distance authority must be established.7. As organizations grow and differentiate, problems can arise with a functional structure. Describe and explain the problems that may arise and how organizations may respond.
Basically a functional organizational structure is the one in which the people are grouped on the basis of their common expertise or experiences or because they use the same resources. Functional structure also has some disadvantages like in this structure the need of the organization of its growing product line is strained because skills and abilities of employees are narrowed. This can be solved through training programs and hiring employees with varied skill sets. Secondly, communication problems can increase because the interaction between various departments is decreased. Create an open line of communication between departments. Thirdly, measurement problems are created like it becomes difficult to analyze which person is more efficient and which is not. In order to determine productivity the number of products or services with the least amount of problems should be an indicator of good productivity. Fourthly, strategic problems are not given significant focus in this structure because the top management is always busy in finding the solutions of coordination problems. Top management should delegate tasks that are important but not in the power of management to handle in a timely manner. When these solutions are implemented the productivity, the profits and the customer base of the organization can be greatly increased.
8. Should an organization always adopt a broad stance on social responsibility? Explain how you agree or disagree with this question and why you have this perspective.
It is common knowledge to business people and customers that the botXXXXX XXXXXne is about making money and the best laid strategies in order to make money. However, there are customers who are concerned with how the products are made and contributions that that businesses are making or could
make that interact with the concerns of the customers. For instance a company that sells jewelry from the mines of Africa, where people are paid very little and treated less than human would have a hard time convincing its customers that it was a humanitarian company even though it gave a small portion of its earnings to feed the hunger in Africa. People are drive by their beliefs and convictions more than they are about money and other benefits that are monetary based. Companies that have been doing philanthropic work for years and actually making a difference catch the attention of the customers and inspire the customers to either share in their efforts or begin buying the their products and using the services. It is very important for companies to not lose their humanity because every customer is human and has feelings. It should not be the driving factor especially if the company is a smaller company, don't stress out or put your company at risk to try and appease the customers beliefs if it's not in your power to do so. Also, if the feelings and actions toward humanitarian efforts are not sincere from the company then don't do it all. 10. Describe and explain how technology complexity affects organizational structure? What role does technology in the form of knowledge play in the production of the organization’s goods and services?
The ability to purchase and use new technologies can cause an organization's growth to be stunted. In order to expand a company would need new cutting edge equipment which because of technological complexity may be out of the price range of the current company. Technology in the form of the Internet allows the research and development team to look up ideas for products and services online. It can also give clues to help the research and development team discover different types of innovations that can modify their existing products and services making them better and more attractive to the customers. Technology can also help the research and design team discover the types of equipment that would be required in order to make new good and services or to modify current goods and services. Once the equipment has been ordered the research and development team can produce prototypes to see how they function in reality and not simply as a concept from the minds of the team. Technology would allow for the editing of certain aspects of the products and services if not completely scrapping them and starting all over. Technology in the form of cost projection programs and statistical programs that analyze the likelihood of the purchase of the new goods and services helps the management to decide how many of the products should be introduced into the marketplace.
11. Why do organizations grow? What types of major crisis is an organization likely to encounter as it grows?
The first step to business growth is selling of the products and services that are produced by the business. It's not enough to simply makes or provide something for the general public and then a few units are sold. There must be massive amounts of sales from various customers in order to make large profits which is what all business are looking to achieve. There are a few pointers to keep in mind about the sales of the business. First, focus on what causes the sales. Make a list of everything you or your company does that leads to sales. Completing this exercise will save you hundreds of hours of time and frustration; failing to complete this list will cost you hundreds of hours of time and dollars. Second, do not confuse proximity with causality. For years, salespeople have made the mistake of over-focusing on “closing skills” as the most important determinant of sales success. In pursuit of discovering what causes sales, sales professionals measure how many times they had to ask for the sale to be successful. All companies that attempt to grow will encounter growing pains and lack of capital is the first one. This can range from no money to expand or limited funds in order to expand a certain part of the business while the rest of it stays beyond. Another problem could be the lack of skilled employees.
12. Describe and explain how evolutionary change and revolutionary change differ. What are examples of each?
Evolutionary change can be described as a gradual change that occurs in a product or service over a period of time. Evolutionary change could be the interior and the exterior design of a restaurant. The look that attracted customers fifty years ago may not be as attractive to people in 2011. Research and a design overall will be required in order to keep the business running. Another example would be the look of a product such as soda, snack bags or even milk. The way a product is displayed when first produced is not necessarily the type of wrapping or presentation that will keep the customers' attention. One example would be the evolution of the Coke containers.
Revolutionary change is not a gradual change in products or services but rather an abrupt and sudden change. One example would be the merging or acquiring of a company. The products and services that were a part of the original company will change almost overnight in order to accommodate the new owners and their vision for the company. An example would be if Microsoft took over Apple. The process in this case would be extremely painful because the employees of the original company would need to learn the new culture of the company and as well as the new rules and products.
13. How do cognitive biases affect organizational learning and the quality of decision making? What can be accomplished to reduce the negative impact?
Cognitive biases and decision making, most of the time, managers are fairly good decision makers. On occasion, however, problems can result because human judgment can be adversely affected by the operation of cognitive biases that result in poor decisions. Cognitive biases are caused by systematic errors in the way decision makers process information and make decisions. Sources of these errors include prior hypotheses, representativeness, the illusion of control, and escalating commitment. Managers should undertake a personal decision audit to become aware of their biases and thus improve their decision making. By using the scientific method a hypotheses can be formulated about a situation or an event. The purpose of the method itself is to come up with answer based on the hypothesis. If there is no evidence to support the claim then it must be rejected and new one put in place. When dealing with this type of problem statistics of the companies performance in comparison with the hypothesis success or failure would help persuade management to take a different route. Also, it's important for management to know that delegating tasks is not the same as delegating authority. No one man is an island and no one can do all the tasks set before them alone. The management will need dependable employees to carry out and complete such matters with the highest level of quality.
14. What is the relationship between quantum and incremental technological change? Why are these types of change important to organizations?
Quantum technological change is the sudden and significant changes that occur in the field of technology which allows for advancements years before their time. It can be defined as technology that is developed at least 100 years before it's time. Like having cellphones in the 1950s. Incremental technological changes are represented by gradual steps that are taken to turn one form of technology into another form of technology. Think about the smart-phone for one moment, trace its history, we had pagers first. These pagers were fairly large and then they became smaller and then they were replaced with PDAs. Then PDAs were phased out and we were left with smart-phones. This was a step by step process that may have require reverse engineering to get the job done.
Organizations rule their respective industries by staying ahead of the competition. The way to do so is through the products and services that were produced and offered. Sometimes companies in an industry can be so similar that they are constantly competing to find out who will win the most customers that year and make the most profits. Sometimes one company may announce the launch of a new product and the other company only has a limited amount of time to counter it with their own product, in this case quantum would be excellent. Incremental is safe because the company has a chance to see how the public is reacting to the new products. This way you won't make large amount of products that no one really wants or needs.
15. How can the design of the organization’s structure and culture give some subunits more power than others?
The structure of your business will act as the backbone and support concerning decision making and other processes. Deciding early what type of organizational system you want to implement will help to ease the stress of the initial start-up. If each person in the organization knows what he or she is supposed to be doing, there is less room for confusion and poor judgment. Perhaps setting up a management team would work the best for your organization, or perhaps a hierarchy of decision makers would work better. Either way, setting up a definite structure before important shots are called makes a difference. Organizational culture encompasses the values and beliefs of the company, the foundations on which it stands and operates. Power is associated with connections, knowledge and leverage of other kinds. In the case of organizational structure and the power of subunits one way is through who you know. Let's say for instance that the top-down structure of a company was rule by XXXXX XXXXX, who is the friend of Adam Sands an employee from the newly recruited class. Because they had a previous relationship before coming to work for the same company, it's possible that Mr. Smith will listen to the ideas of Mr. Sands and give special treatment.
16. Explain how a subunit within an organization can acquire power or influence decision making in their favor.
Again it's about communication, resources, knowledge and other types of leverage in order to get ahead in the company. Communication and knowledge go hand in hand because it's about who you know and how to address them in order to get what you want. You might know the president of the company personally but you will still need to address him or her appropriately in order to get a request looked at or carried out. The subunit may have the greatest amount of resources in the company and in order to use them the company may need to make concessions for that subunit. Other types of leverage could include but not be limited to blackmail and bribery. The first case is the forcing of someone's hand in favor of something that you want done. There could be evidence of kickbacks in the company that a data mining group found within the company, in order to keep the information private the company will make concessions for the blackmailers. The second option involves the usage of resources to get the job taken care of when paying someone off to help you. Depending on the subunits level of importance sabotage might become a viable option. By secretly messing up another groups progress, the lower group would have the chance to rise and make their presence known.
I'll close the question.
Technical complexity involves difficulties in fact finding, technical information, and the systematic identification and analysis of options and their likely consequences. Technology is constantly changing and the types of equipment that are produced in this industry are made in massive amounts. For instance computers are constantly being produced, servers, cellphones and MP3 players. As time progresses and I don't mean years, I mean months, new components and new types of software will be produced and incorporated into these technologies. Because these innovations are so new it is often difficult to find the proper information, espcially if the product is only a few days old. A week or two is not enough time to find, evaluate and fix problems. It might take another couple of months or close to a year but during that time computers and other such equipment will still be produced and used. Also, while the newest innovations are being tested, evaluated and fixed more innovations are being created. This is not a static market but a fluid one filled constant changes. The ability to purchase and use new technologies can cause an organization's growth to be stunted. In order to expand a company would need new cutting edge equipment which because of technological complexity may be out of the price range of the current company. Technology in the form of the Internet allows the research and development team to look up ideas for products and services online.