Organisation Structure
What are the two types of integrating mechanisms?
Formal Integration: 1. Reporting lines 2. Formal Assignments 3. Cross-functional teams 3. Departmentation
Informal Integration: personal relationships among managers transnationally
What did Alfred Chandler say about strategy and structure?
The structure must be configured to support the strategy otherwise the strategy would fail.
What are the two dimensions of knowledge management? Briefly describe each.
Explicit Knowledge:
codifiable, can be written down, stored, and transferred with little loss of richness of the message
Implicit Knowledge:
not codifiable, it is personal, built through doing and experience, acquisition and transfer require hands-on practice
Is organization structure part of organization architecture? Yes or No. What is organization architecture?
Yes, organization architecture, is the totality of the firm's organization which includes:
1. structure
2. control systems and incentives
3. Processes
4. organisation culture
5. people
What is centralisation?
Decision-making is done at a higher level by a few senior managers and is related to a hierarchical structure.
What structure is best if an organization has an international strategy?
International Division Structure: This is the set-up when companies initially expand abroad using a home replication strategy. All international activities are centralized within one division separate from domestic units.
What type of knowledge do formal and informal mechanisms respectively have? Give real examples of how both mechanisms deal with their respective type of knowledge.
Formal Mechanism (Explicit Knowledge): Organise formal systems and processes that deal with explicit knowledge (e.g. database, intellectual property, expert systems).
Informal Mechanism (Implicit Knowledge): To create a learning mechanism by which tacit knowledge can be shared, transferred, and leveraged ( e.g. knowledge networks, use of social media ).
What are control systems and incentives?
the bigger the size the greater the need for control systems
-these can be personal controls, bureaucratic controls, output controls and cultural controls
- the behavior of managers, employees, and units has to be monitored and hence we need control which may be formal or informal.
The role of incentives is to get things done that are desirable.
- incentives are rewards to managers, employees, and units and are usually related to profitability
What is decentralization?
Decision-making is devolved to the lower levels or to managers in local areas globally. It is more relevant to a multi-domestic or transnational strategy
What organizational structure is best adopted if an organization has a transnational strategy? Give a brief description of the structure.
The Global Matrix strategy is the best of both worlds; it minimizes the limitations of the geographical area structure and the global product division structure.
What are the advantages of knowledge management that international businesses can gain?
1. facilitates responsiveness to environmental changes such as the pandemic
2. promotes innovation and increased efficiency
3. supports decision-making process - knowledge is an intangible resource and hence contributes to the competitive advantage
4. facilitates the adoption of best practices e.g. Six Sigma quality control process.
What are the two types of business processes?
Core processes: mission statement, competitive advantage
Support processes: customer service, budget allocation, accounting documentation, etc
List 3 benefits and 3 limitations of centralization.
Benefits:
1. top management can make decisions on major organizational changes
2. HO can control and co-ordinate - Avoid duplication of activities
3. Certain functions need to be centralized – e.g. R&D, Legal, and Information systems in one or two locations
4. Where standardization of product is essential e.g. Boeing
Limitations: 1. lower or branch managers not motivated – decisions made by a senior manager.
2. slows down decision-making process – top management can be burdened with decision making 3. not aware of what is happening in global markets 4. problem of control and co-ordination when a firm becomes bigger globally
If an organization has a global standardization strategy, what organizational structure should it adopt? Give reasons and illustrative examples.
Organization Structure: Global Product Division
What does knowledge management look like for a Global standardization strategy?
The centralization of knowledge activities in the parent company will be even greater
What is organizational culture?
- what are its values and norms and how are people working to feel that they are part of common objectives
-Culture may lead to a competitive advantage for the firm
– culture can be related to high performance – e.g. Google has a culture of innovation.
- The right culture is necessary to integrate activities worldwide
- Culture promotes co-operation rather than conflict - Right culture supports the working of processes
- Too strong a culture may not be supportive especially when an organization is not doing well and may therefore inhibit performance
List 3 benefits and 3 limitations of decentralization
Benefits:
1. managers in local areas/countries will be motivated – a greater degree of discretion, control, and freedom
2. autonomous, self-contained units – sub-unit managers accountable for performance
3. better decisions as managers are aware of local problems than those in HO.
4. good grounds for training young managers
5. HO managers are free to concentrate on strategic issues
Limitations:
1. need to find managers who are independent and knowledgeable of the local area
2. local managers may only be interested in their own local problems and not those of HO
3. some local managers may develop their own kingdom and isolate the branch from HO
4. HO may feel that their authority is diluted as local managers make decisions.
What are the characteristics of, and challenges with geographical area structure, and under what conditions is it best adopted?
1pt for characteristics, challenges, and conditions (a strategy that matches)
Characteristics:
Challenges:
Conditions:
For Implicit Knowledge, IBM discovered that there is an inherent problem with the Global Matrix Structure as due to its complex and multi-disciplinary nature it created a cobweb that prevented the sharing of knowledge. What mechanism did Bartlett and Goshal introduce to solve this problem?
The "transnational solution" is the use of an informal integrative mechanism.
This is an unstructured and unofficial methods that facilitate communication and collaboration which harness the benefits of implicit knowledge.
Examples: Social Networks, Cross-functional teams, mentorship, and informal gatherings.
How do you find and manage the right people to support the organization's architecture?
the right HRM strategy of recruitment, selection, training, development, and performance appraisal will ensure that the organization has the right competencies ( skills + knowledge ) and values to support the organization’s architecture.