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Exam 8: Adapting Organizations to Todays Markets

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Question 171

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Most businesses adopt a bureaucratic organization in order to speed up their decision making process. In a bureaucratic organization there are typically many layers of management with rigid rules and regulations.A strict chain of command is followed which can slow down the decision making process.

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Question 172

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Some firms use a combination of departmentalization techniques.

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Question 173

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Which of the following is an example of a move to reorganize?

An organization's core competencies are those functions that the firm performs as well as or better than anyone else in the world.

Milton Learning Centers is a private firm specializing in helping students with learning problems.Located around the country,each center employs a manager and several tutors and counselors.The counselors and tutors have a great deal of flexibility to design programs specifically for individual students.In fact,these first-line employees are considered to be the key people in the organization,and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials.This type of arrangement suggests that Milton is an inverted organization. In an inverted organization,the key people are the first-line employees who deal directly with customers.These employees are empowered to respond to the wants and needs of customers.There are few layers of management,and the job of managers is to assist first-line employees rather than boss them around.

One advantage of a bureaucratic organization is that:

The informal organization is created by the decisions of top management.

As organizations grew,the use of Fayol's principles led to rigid organizations that didn't always respond quickly to consumer requests. Organizations were designed according to Fayol's principles so that no person had more than one boss.These principles tended to be written down as rules,policies,and regulations as organizations grew larger.The process of rule making often led to rather rigid organizations that didn't always respond quickly to consumer requests.

Rome Corporation is organized into departments such as finance,production,marketing,data processing,and accounting.Rome has chosen to departmentalize by function. Departmentalization by function means to group workers into departments based on similar skills,expertise,and resource use.

The proven success of job specialization lies in the fact that:

In Weber's view of a bureaucratic organization,the organization demanded:

Contemporary businesses are:

Empowering employees to better serve customers requires __________ front-line employees.

As a new employee in a bureaucratic organization,Nancy can expect a great deal of independence and authority. In a bureaucratic organization,everyone is expected to follow specific rules.One of the problems with this type of organization is that employees have little flexibility to respond to customer wants and needs.

Sam supervised a group of people in a very large organization.The refrigerator in the lunchroom stopped functioning.Although he started the paperwork on the day it died,the refrigerator request went out for bid;two middle managers needed to approve it;and,the purchasing director had final approval.The refrigerator arrived six months later.Max Weber would have approved of the detail and documentation Sam's company accumulated to back-up the purchase. Max Weber is known as the originator of bureaucracy,where decisions are followed-up with lots of paperwork and documentation.There are several layers of management,and decisions must be approved by several people,creating a significant amount of lag time from the first recognition of a problem,until the problem is finally solved.

Organizational culture can produce either a positive or negative impact on an organization.

Antonio works in the accounting department of a large firm.This is an example of Fayol's division of labor concept. Henri Fayol's division of labor suggests that efficiency can be improved if employees are assigned into an area of specialization,such as production,marketing,and finance.

Cross-functional teams that go beyond company boundaries share production information but seldom market information. Cross-functional teams are transparent.They share as much information as necessary to succeed in building a product that is needed by the marketplace.These teams go outside of the boundaries of one company.Sometimes the team will share information with government employees and/or employees from around the globe.

Cross-functional teams work best when the "voice of the customer" is brought into organizations.

As indicated in the Making Ethical Decisions box titled,"Safety versus Profit",organization decisions that affect profits in a negative way should be avoided at all cost. As indicated in the Making Ethical Decisions story,how your organization performs the job is very important.Setting an organization culture is as important as setting an organization structure.Adhering to safety precautions when doing the job demonstrates management's commitment to their employees.