What are the different types of organizatio.docx

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What are the different types of organizational goals?
What are the hierarchical aspects of organizations?
How is work organized and coordinated?
What are bureaucracies and what are the common forms?
Copyright © 2010 John Wiley & Sons, Inc.
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Societal goals
Reflect an organization’s intended contributions to the broader
society.
Enable organizations to make legitimate claims over resources,
individuals, markets, and products.
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Enable organizations to gain legitimacy, a social right to
operate, and more discretion for their non-societal goals and
operating practices.
A written statement of organizational purpose.
A good mission statement identifies the product or service,
whom the firm will serve, and how it will go about
accomplishing its societal purpose.
Mission statement
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A firm’s societal contribution is often part of its mission
statement. Executives who link their firm to a desirable mission
can lay claim to important motivational tools that are based on a
shared sense of noble purpose.
Aflac“To combine innovative strategic marketing with quality
products and services at competitive prices to provide the best
insurance value for consumers.”
Harley-Davidson – “We fulfill dreams through the experience of
motorcycling, by providing to motorcyclists and to the general
public an expanding line of motorcycles and branded products
and services in selected market segments.
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Output goals
Define the type of business the organization is pursuing.
Provide some substance to the more general aspects of mission
statements.
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For some corporations, answering the question of which
business they are in may yield a more detailed statement
concerning their products and services. These product and
service goals provide an important basis for judging the firm.
Systems goals
Concerned with the conditions within the organization that are
expected to increase the organization’s survival potential.
Typical systems goals include growth, productivity, stability,
harmony, flexibility, prestige, and human resource maintenance.
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Systems goals provide short term organizational characteristics
that higher-level managers wish to promote. The goals,
however, must often be balanced against one another.
A focus on attaining market share through increased
productivity may reduce the flexibility of an organization to
respond if the economy slows and the demand for their product
suddenly decreases.
Well-defined systems goals can:
Focus managers’ attention on what needs to be done.
Provide flexibility in devising ways to meet important targets.
Be used to balance the demands, constraints, and opportunities
facing the firm.
Form a basis for dividing the work of the firm.
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To insure success, management must match decisions for
attaining goals with appropriate choices in how to reach them.
Systems goals are important to a firm because they provide a
road map that helps the firm link together various units of the
organization to assure survival.
The formal structure is the foundation for managerial action
It shows the planned configuration of positions, job duties, and
the lines of authority among different parts of the organization.
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Vertical specialization
A hierarchical division of labor that distributes formal authority
and establishes where and how critical decisions are to be made.
Creates an arrangement of work positions in order of increasing
authority.
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Top managers or senior executives plan the overall strategy of
the organization and plot its long-term future.
They also act as final judges for internal disputes and certify
promotions, reorganizations, and the like.
Middle managers guide the daily operations of the
organization, help formulate policy, and translate top-
management decisions into more specific guidelines for action.
Organization charts
Diagrams that depict the formal structures of organizations.
Typically show the various positions, the position holders, and
the lines of authority.
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While an organization chart may clearly indicate who reports to
whom, it does not show how work is done, who exercises the
most power over specific issues, or how the firm will respond to
its environment.
When an organization is required to adapt quickly to evolving
external and environmental changes, the organizational chart
can become obsolete.
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The organizational chart is presented as a diagram, identifying
the reporting relationships throughout the organization, and the
lines of authority and communication.
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Span of control
The number of individuals reporting directly to a supervisor.
New information technologies have made it possible for
complex organizations to broaden span of control.
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Line units
Work groups that conduct the major business of the
organization (production and marketing departments).
Staff units
Work groups that assist the line units by providing specialized
expertise and services to the organization (accounting, public
relations).
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Internal line units - Transform raw materials and information
into products and services (production department).
External line units - Maintain outside linkages (marketing
department).
Internal staff units - Assist the line units in performing their
functions (accounting department).
External staff units - Assist the line units by linking the firm to
its environment and in buffering internal operations (public
relations).
In Figure 16.1, the Legislative Liaison unit is external staff,
with a line relationship to the office of the VP for External
Affairs.
Control

The set of mechanisms used to keep actions and outputs within
predetermined limits.
Deals with:
Setting standards
Measuring results against standards
Instituting corrective action
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Output controls
Focus on desired targets and allow managers to use their own
methods to reach defined targets.
Part of overall method of managing by exception.
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Output controls are popular because they promote flexibility
and creativity as well as facilitate dialogue concerning
corrective action. Reliance on outcome controls separates what
is to be accomplished from how it is to be accomplished.
Process Controls
Attempt to specify the manner in which tasks are accomplished.
Types of process controlsPolicies, procedures, and

rules.Formalization and standardization.Total quality
management controls.
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Rules, procedures, and policies are often employed as
substitutes for direct managerial supervision, allowing the
organization to specifically direct the activities of many
individuals and across many work locations.
Policy
Outlines important objectives and broadly indicates how
activities are to be carried out.
Procedures
Describes the best method for performing a task; shows which
aspects of a task are most important.
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Rules
Describe in detail how a task or a series of tasks is to be
performed, or indicate what cannot be done.

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Policies, procedures, and rules are often used as substitutes for
direct managerial supervision.
Formalization
The written documentation of policies, procedures, and rules to
guide behavior and decision making
Standardization
The degree to which the range of allowable actions in a job or
series of jobs is limited so that actions are performed in a
uniform manner
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Written instructions allow individuals with less training to
perform comparatively sophisticated tasks. Written procedures
may also be available to ensure that a proper sequence of tasks
is executed, even if this sequence is performed only
occasionally.
Total Quality Management
Process approach to continual improvement based on statistical
analyses of the firm’s operations.
Outlined by W. Edward Deming’s 14 points.

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Centralization
Degree to which the authority to make decisions is restricted to
higher levels of management.
Decentralization
Degree to which the authority to make decisions is given to
lower levels in an organization’s hierarchy.
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Greater centralization is often adopted when the firm faces a
single major threat to its survival.
Benefits of decentralization
Higher subordinate satisfaction.
Quicker response to a series of unrelated problems.
Assists in on-the-job training of subordinates for higher-level
positions.
Encourages participation in decision making.
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Many people want to be involved in making decisions that
affect their work. Participation results when a manager
delegates some authority for such decision making to
subordinates in order to include them in the choice process.
Horizontal specialization
A division of labor that establishes specific work units or
groups within an organization.
Functional departmentalization
Grouping individuals by skill, knowledge, and action.
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With horizontal specialization, work is more project-focused
and training in both technical and teamwork skills becomes
more of a top priority.
However, whenever managers divide tasks and group similar
types of skills and resources together, they must also be
concerned with how each group’s individual efforts will
integrate with others.
Functional departmentalization
Grouping individuals by skill, knowledge, and action.
Examples include marketing, finance, production, and human
resources.
Most frequent form of horizontal specialization found in
organizations.

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Divisional departments
Individuals and departments are grouped by products,
territories, services, clients, or legal entities.
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Many larger, geographically dispersed organizations that sell to
national and international markets may rely on departmentation
by geography. The savings in time, effort, and travel can be
substantial, and each territory can adjust to regional differences.
The major advantage is flexibility in adapting to external
changes and demands.

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Matrix departmentalization
Uses both the functional and divisional forms simultaneously.
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Matrix structure work best for large, complex organizations,
where precise integration and controls are needed across many
sophisticated functional specialties and corporations.
This is often more than a functional or divisional structure can
provide, for many firms do not want to trade the responsiveness
of the divisional form for the technical emphasis provided by
the functional form.
Coordination
The set of mechanisms that an organization uses to link the
actions of its units into a consistent pattern.
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Within a unit, much of the coordination is handled by its
manager.
Smaller organizations rely on management hierarchy for
coordination. As the organization grows, more efficient and
effective methods of coordination are required.
Unlike ‘control’ mechanisms which involve the vertical exercise
of formal authority involving targets, measures, and corrective
action, coordination stresses cooperative problem solving.
Personal methods of coordination
Produce synergy by promoting dialogue, discussion, innovation,
creativity, and learning, both within and across units.
Common personal methods of coordination are direct contact
and committee memberships.
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Committees can be effective in communicating complex
qualitative information and in aligning schedules, workloads,
and assignments to increase productivity.
Impersonal methods of coordination

Produce synergy by stressing consistency and standardization so
that individual pieces fit together.
Contemporary use of matrix departmentalization and
management information systems for coordination.
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Management information systems, once used solely for process
control of diverse subordinate units, are now evolving as
strategic electronic networks, linking individuals throughout the
organization.
Bureaucracy
Form of organization that emphasizes legal authority, logic,
clear division of labor, promotion by merit, and administrative
rule.
Mechanistic - emphasizes vertical specialization and control.
Organic – emphasizes horizontal specialization.
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Weber argued that the rational and logical idea of bureaucracy,
like a ‘well oiled machine’, was superior to building a firm
based on charisma or cultural tradition.
Since bureaucracy prizes efficiency and logic, he believed that
it could be expected to be fair to employees than is allowed
under a dictatorial structure.

Although charismatic leadership and cultural traditions are still
important, the reality of today’s organizations point to the
equal importance of rational, legal, and efficiency standards.
Mechanistic bureaucracy
Rigid, command-and-control structure.
Important when there is a need for uniform product quality,
speedy service, and cleanliness
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McDonald’s is one example of a mechanistic bureaucracy .
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Benefits of the mechanistic type
Efficiency.
Limitations of the mechanistic type
Employees dislike rigid designs, which makes work motivation
problematic.
Unions may further solidify rigid designs.
Key employees may leave.
Can hinder organization’s ability to adapt.
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Often used by firms in pursuing strategy of becoming a low-cost

leader. Using a machine bureaucracy can hinder an
organization’s capacity to adjust to subtle external changes or
new technologies.
Organic bureaucracy
Emphasizes horizontal specialization, lateral relations, and
coordination.
Minimal use of formal procedures.
Considerable reliance on judgment of experts.
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Used to pursue strategies that emphasize product quality, quick
response to customers, or innovation.
Benefits of the organic type
Good for problem solving and serving individual customer
needs.
Centralized direction by senior management is less intense.
Good at detecting external changes and adjusting to new
technologies.
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Limitations of the organic type
Less efficient than mechanistic type.
Restricted capacity to respond to central management direction.
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Control is enhanced by the standardization of professional skills
and the adoption of professional routines, standards, and
procedures.
Most universities are professional bureaucracies.
Common types of hybrid bureaucracies
Divisional firm
Composed of quasi-independent divisions so that different
divisions can be more or less organic or mechanistic.
Conglomerate
A single corporation that contains a number of unrelated
businesses.
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While the divisions may be treated as separate businesses, they
often share a similar mission and systems goals.
Conglomerates, on the other hand, are groups of unrelated
businesses that have different products and different goals, but

exist under a large umbrella organization. (For example, NBC,
General Electric, states, and federal entities).
BUSI 620
Questions for Critical Thinking 7
Salvatore's Chapter 14:
a.
Discussion Questions: 12 and 15.
b.
Problems: spreadsheet problems 1 and 2.
Note:
1. Spreadsheet problem 1: Use table 14-4 as reference.
2. Spreadsheet problem 2: Use tables 14-5 and 14-6 as
reference.
Froeb et al.’s Chapter 17:
a.
Individual problems: 17–1 and 17–4.
a.
Individual problems: 19–5 and 19–6.
Note:
P19-6: Need to consider the adverse selection.
Note:
19–6: Consider with and without the adverse selection.
Salvatore's Chapter 15:
a.

Discussion Questions: 7.
b.
Problems: 8, 10, and spreadsheet problem 1.
Note:
1.
P8: Remember the firm has a limited capital budget of $2.4
million for the coming year. In other words, the firm faces the
capital rationing and should use the profitability index as its
investment criterion (pp. 637–640).
2.
P10: Use the dividend valuation model (pp. 642–643). “A share
of the common stock of the company currently sells for eight
times current dividends.”
3.
Spreadsheet problem: Change the present value coefficient from
1/(1+0.5)n to 1/(1+0.05)n. That is the discount rate of 5%
instead of 50%
Sheet1Salvator's chapter 15 spreadsheet problem 1 (p. 652)End
of YearInvestment (Year 0) and CostRevenueNet
RevenuePresent Value CoefficientPresent Value of Net
Revenue01000.00-1000.001.00-
1000.001200.00600.00400.000.95380.952300.00800.003300.008
00.004400.00800.004200.00Total Present Value
Sheet2
Sheet3
Sheet1Salvator's chapter 12 spreadsheet problem
(p.523)TRConsumer's SurplusTotal amount that consumer is
willing to payQ624933P41st DegreeTRConsumer's Surplus2
PricesTRConsumer's SurplusP15.5P24The
DataQP1401211028364452607
Sheet1
The Demand Curve

Sheet2
Sheet3
BUSI 620
Questions for Critical Thinking 6
Salvatore’s Chapter 12:
a. Discussion Questions: 7, 11, and 13.
b. Problems: 12 and spreadsheet problem 1 (p. 523).
Note:
1.
P12: You could use figure 12-4 as a reference (p. 492).
2.
Spreadsheet problem 1: This is the demand curve for Q=14-2P.
a. Individual problems: 14–1 and 14–4.
Salvatore’s Chapter 13:
a. Discussion Questions: 8 and 10.
b. Problems: 12, 13, and 15.
Note:
1. P12: Need to calculate Herfindahl index.
2. P13: Use the internet search or other sources to answer this
problem.
3. P15: (b) A lump sum tax is a fixed cost, (c) a $3 per unit tax
is a variable cost which will cause AC and MC to increase by

$3.
Submit this assignment by 11:59 p.m. (ET) on Sunday of
Module/Week 6.
Problem Statement:With operations in more than 160 countries
and regions worldwide, 340,000 employees, and $17.9 billion in
annual profits - Toyota Motor Corp has been referred to as the
gold standard of the automotive industry. Toyota reached
success in part because of its exceptional reputation for quality
and customer care. In total contrast, Toyota embodies a culture
of smug, insular arrogance unable to properly handle a recall
crisis. The general problem and focus of the current case study
is Toyota's arrogant organizational culture and structure of
denial. The goal of this study is to examine characteristics of
organizational culture as it relates to crisis management.
Research Questions:
1) What is the relationship between organizational culture and
ethics?
2) Compare and contrast the transparency, efficiency, and
consumer trust issues of GM and Toyota.
3) How do organizational structures and models differ in
contrast to Toyota's?
4) What are the behavioral implications of culture and conflict?
These questions are only food for thought. You can change
these or add more. The goal is to stay consistent in research
tone and focus to the research problem noted above.
SUB-HEADERS: Not limited to, your literature review MUST
cross-reference and integrate a discussion on elements of the
case and the following topics: (1) Organizational Culture, (2)
Organization Structure, (3) Leadership, (4) Ethics, (5)
Understanding Work Teams, & (6) Conflict and Negotiation.
YOU MUST DISCUSS THE PROS AND CONS OF EACH.

Research cannot be one-sided or it is not valid and reliable.
My Parts
Literature Review
You must address at least six scholarly resources in this section.
Approach this section as a mini "book report" on each of the
reference sources that significantly informed your analysis and
proposed solutions. Give the reader an encapsulated review of
what information you found most relevant to your research. You
may have found conflicting opinions/theories related to your
topic area. Identify and discuss any such contrasts and/or
describe in detail significant agreement among your sources.
Your literature review should be separate and distinct from your
analysis section; it is a summation of your research.
Solution
s
Identify at least three potential workable solutions to your
problem and identify the pros and cons of each alternative
solution and its high-level implementation steps.
Identify your preferred solution and describe exactly what
should be done and how it should be done, including by whom,
with whom, and in what sequence. Always explain your
thinking behind your final solution set. It's important to be clear
about why a particular alternative (solution) was chosen, as
opposed to others.

Reflection : Think about this assignment and write a well-
thought-out reflective statement about how this assignment
influenced your personal, academic, and professional leadership
and managerial development.
CASE
Did Toyota’s Culture Cause Its Problems?
You may be familiar with the problems that have recently
plagued Toyota. However, you may not know the whole story.
First the facts. In 2010 Toyota issued a series of recalls for
various models. The most serious was for a defect called
“unintended acceleration,” which occurs when a car accelerates
with no apparent input from the driver. Investigations revealed
that unintended acceleration in Toyota cars has been the cause
of 37 deaths since 2000. When the problems first surfaced,
however, Toyota denied it was the cause. Eventually, Toyota
apologized and recalled more than 9 million cars.
To many, the root cause of Toyota’s problems was its insular,
arrogant culture.Fortune argued: “Like GM before it, Toyota has
gotten smug. It believes the Toyota Way is the only
way.” Time reported “a Toyota management team that had
fallen in love with itself and become too insular to properly
handle something like the current crisis.” Transportation
Secretary Ray LaHood described Toyota’s culture as “safety-

deaf.”
But is this the reality? Increasingly, evidence suggests that
Toyota’s culture—or even the cars it produces—is not the
source of the problem.
A 2011 report released by the U.S. National Highway Traffic
Safety Administration (NHTSA) concluded that unintended
acceleration was not caused by problems in the electronic
circuitry. The Wall Street Journal wrote that “safety regulators,
human-error experts and auto makers say driver error is the
primary cause of sudden acceleration.” Forbes and The
Atlantic commented that most of the incidents of sudden
acceleration in Toyota cars occurred 537538with elderly
drivers, and elderly drivers are known to be more prone to
confusing pedals. Many other independent investigations,
including ones conducted by automobile experts at Popular
Mechanics and Car and Driver, reached the same conclusion:
the main cause of unintended acceleration was drivers mistaking
the gas pedal for the brake pedal.
There’s a long history of misreporting on this issue. Audi was
nearly driven into bankruptcy when 60 Minutes aired a report,
“Out of Control,” purportedly proving that defects in the car
were behind six fatal sudden-acceleration accidents. As it turns
out, 60 Minutes paid sometime to tamper with the car—filling a
canister of compressed air linked to the transmission—to cause
the sudden acceleration shown in the segment. Further

investigations never uncovered evidence that defects in Audi’s
cars were behind the incidents.
Does Toyota have an insular and inbred corporate culture?
Probably. But it’s been that way for a long time, and it’s far
from clear that the culture, or even the company’s cars, is
responsible for the sudden acceleration problems.
Questions
1.
If Toyota is not the cause of unintended acceleration, why was
it blamed for it?
2.
Investigations have shown that after stories of unintended
acceleration are publicized, report of incidents increase for all
automakers. Why is this the case?
3.
Is it possible to have a strong—even arrogant—culture and still
produce safe and high-quality vehicles?
4.
If you were the CEO of Toyota when the story was first
publicized, how would you have reacted?

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