Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 09 - Organizational Agility
9-16
LECTURETTE 9.1: The Ideal and Future of Bureaucracy
THE IDEAL BUREAUCRACY
1. Max Weber, a German sociologist, made his mark on management theory when he developed his
concept of bureaucracy. As large organizations were evolving out of the industrial revolution, they
3. Weber understood that the “ideal bureaucracy” did not exist anywhere, but he advocated that manag-
ers should work to that end by creating organizations with the following characteristics:
Specialization of Labor Tasks should be broken down into routine, well-defined activi-
ties so that all employees would know exactly what is expected
of them and would become, in a short time, expert in their spe-
cific task assignments.
Well-defined Hierarchy Positions should be placed in multiple levels, with precise report-
ing relationships among levels. The hierarchy provides for the
supervision of lower-level offices by higher-level ones, a method
for handling exceptions, and the ability to establish accountabil-
ity.
THE OFFICERS IN A BUREAUCRACY
1. According to Weber, one of the critical features of the ideal bureaucracy was the appointment of its
officers. It was his contention that all organizational officers (managers) should be appointed and
should function according to the following criteria:
➢ Officers (managers) are free as individuals and are subject to organizational authority only in
terms of their impersonal, official obligations.
LECTURETTES
Chapter 09 - Organizational Agility
9-17
➢ Officers (managers) are to be organized in a clearly established hierarchy of offices.
➢ Each managerial office should have a clearly defined sphere of competence.
THE COMING DEATH OF BUREAUCRACY
1. Contemporary management writers, reflecting the public’s negative attitude toward modern-day bu-
reaucracies with their red tape and complexities, argue that bureaucracies will die unless they are able
to adapt to the change in their environments.
2. Weber would agree because he never envisioned the sort of bureaucracy that has evolved and re-
placed his “ideal bureaucracy.”
Over the years, bureaucracies have moved away from Weber’s ideal and have assumed a number
of negative characteristics, which will probably cause their demise. Specifically, they:
3. Bureaucracies must clean up their acts or die.2
LECTURETTE 9.2: Organizational Culture
ORGANIZATIONAL CULTURE DEFINED
1. The concept of organizational culture has evolved from a number of definitions, such as:
➢ The way we do things around here.
Chapter 09 - Organizational Agility
9-18
2. Texts define corporate culture as a set of important assumptions about the organization, and its goals,
problems, and practices that members of the company share.
3. It seems clear that these definitions of organizational culture agree; that it is a shared system of core
values.
THE NATURE OF ORGANIZATIONAL CULTURE
1. Those shared organizational values that define organizational culture have the following characteris-
tics:
➢ Individual initiative – that degree of responsibility, freedom, and independence that individuals
enjoy.
2. The shared beliefs and core values that constitute organizational culture are transmitted to employees
by way of rites and ceremonies, stories, legends, and myths.
➢ Rites and ceremonies are elaborately planned activities at a special event. There are four types of
rites used by organizations to transmit culture to their members. The rites of:
3. An organization’s dominant culture delineates the core values that are shared by most of the members.
4. Subcultures are minicultures that tend to exist within specific departments or work groups.
5. Core values are the dominant values of an organization that are shared by all its members.
Chapter 09 - Organizational Agility
9-19
MANAGING CULTURAL CHANGE
1. Major organizational change must be preceded by changes in the organization’s culture. Therefore,
culture is seen as a phenomenon that management must learn to manage. Organizational culture can
be changed by using the following strategies:
➢ Conduct a cultural audit to be sure the present culture is well understood.
Chapter 09 - Organizational Agility
9-20
1. Discuss evidence you have seen of the imperatives for change, flexibility, and responsiveness
faced by today’s firms.
It may be useful for students to look at industries rather than individual companies. A good example
would be the American automobile industry. Facing a declining market share (as a result of Japanese
2. Describe large bureaucratic organizations with which you have had contact that have not re-
sponded flexibly to customer demands. And describe examples of satisfactory responsiveness.
What do you think accounts for the differences between the responsive and nonresponsive or-
ganizations?
The term “bureaucracy” was defined by Max Weber to describe any organizational design that relies
on specialization of labor, a specific authority hierarchy, a formal set of rules and procedures, and rig-
id promotion and selection criteria. However, many students will probably think of governmental
3. Considering the potential advantages of large and small size, would you describe the “feel” of
your college or university as big, small, or small-within-big? Why? What might make it feel dif-
ferent?
DISCUSSION QUESTIONS
Chapter 09 - Organizational Agility
9-21
In the case of a college or university, size normally (but not always) offers prestige, a broader range
of courses and facilities, greater support for students, greater academic achievement on the part of the
faculty, and stability. A small college or university, by contrast, generally offers smaller classes and a
greater sense of intimacy and friendliness. However, it often has limited facilities, a limited range of
The text suggests four sources of clues about the corporate culture:
➢ Corporate mission statement and official goals.
ture?
4. What is a core capability? Generate some examples of companies with distinctive competencies,
identifying what those competencies are. Brainstorm some creative new products and markets
to which these competencies could be applied.
A core competence is the capability – knowledge, expertise or skill – that underlies a company’s abil-
ity to be a leader in providing a range of specific goods and services.
5. If you were going into business for yourself, what would be your core competencies? What
competencies do you have now, and what competencies are you going to develop? Describe
what your role would be in a network organization and the competencies and roles of other
firms you would want in your network.
Chapter 09 - Organizational Agility
9-22
Students (especially those at the undergraduate level) may feel that although they have a number of
attributes (enthusiasm, willingness to work hard, a bright idea for a new product or service, etc.), they
have no core competencies (nothing that will enable them to be leaders in a specific field). They may
engineering capabilities.
6. Using an Internet search engine, search for “strategic alliance,” and identify three recently
formed alliances. For each alliance, identify whether the companies’ other products are gener-
ally competitors or complementary products. What are the goals of the alliance? What brought
them together? Discuss whether you think a strategic alliance is an effective way for these or-
ganizations to meet their goals.
Students are likely to find examples of recent alliances between major corporations – especially in
7. What skills will you need to work effectively in (1) a network organization; (2) a learning organ-
ization; (3) a high-involvement organization? Be specific and generate lists. Would you enjoy
working in these environments? Why or why not? What can you do to prepare yourself for
these eventualities?
To work effectively in these three types of organizations requires many of the same business skills
and capabilities since the three types are not mutually exclusive. The management of many firms
would probably argue that they had some of the characteristics of all three-organization types.
Chapter 09 - Organizational Agility
9-23
Chapter 09 - Organizational Agility
9-24
EXERCISE 9.1 - MECHANISTIC AND ORGANIC STRUCTURES
Objectives:
2. To examine aspects of organizations, using your class as an example.
Suggested responses
1. 10 One benefit of an organic organization structure is it creates flexibility and adaptability for
people who have different needs from one another. For instance, an institution is more or-
ganic because it creates flexible time schedules, total quality management, and individuals
Students often believe that whether a class is mechanistic or organic has more to do with an instruc-
tor’s teaching style and personal attributes than anything else. While these factors certainly contrib-
Teaching Tips:
1. It may be helpful to students to start this class by defining the terms “mechanistic” and “organic.”
2. As a variation on the assigned approach, have students complete the worksheet on their own and
EXERCISE 9.2 - THE WOODY MANUFACTURING COMPANY
Overview
This activity provides an opportunity to utilize a mini case to explore alternative work designs for a
successful start-up company. The learner is provided with an opportunity to investigate the potential
EXPERIENTIAL EXERCISES
Chapter 09 - Organizational Agility
9-25
Case Overview
The case, the situation and challenge faced by Mr. Woody are presented in a very short paragraph in
Procedure for Class Discussion
As the teams present their proposals, facilitate class questions that attempt to clarify the essence of the
proposals. Individuals are likely to try to challenge the proposed recommendations. Do not permit a
critique at this stage. After all the teams have presented their ideas, foster a discussion around the fol-
lowing themes.
a. Compare and contrast between the proposed recommendations in terms of their overall strengths
and weaknesses, short-term, moderate-term, and long-term impact.
Teaching Tip:
You might consider using this case as a midterm exam - in a mechanistic class have students pre-
sent their results to the class while you grade them, but in a more organic class, students can
grade papers for each other.
Chapter 09 - Organizational Agility
9-26
DIY Stories
Case Summary:
DIY is a nationwide chain of stores that provides tools and supplies for home repair and maintenance.
To gain an edge in the market they hire avid do-it-yourselfers and retired trade workers and pay them
a little more than the competition. They also provide fact sheets and building tips to customers so
Chapter Topics Related to the Case:
• Discuss the concept of core competencies
Case Discussion Questions:
8. As DIY Stores built its online presence, how well did it organize around its core capabilities?
Suggested Response:
DIY’s greatest strength is in their unique blend of retired trade workers and avid do-it-yourselfers
2. DIY Stores is a large national chain. What impact did its size have on its agility?
Suggested Response:
Typically, one might expect a large organization to respond very slowly. Instead, DIY recognized a
3. How could DIY increase its agility in responding to the importance of the internet?
Suggested Response
CONCLUDING CASE
Chapter 09 - Organizational Agility
9-27
Chapter 09 - Organizational Agility
9-28
Example 9.1 - Responsiveness: Responsiveness involves all functions of the organization, in-
cluding marketing. Branded entertainment is a new trend companies are adopting in order to at-
tempt to engage customers. Webisodes are one example of branded entertainment that relies on
Example 9.2 - Mechanistic and organic organizations: McDonalds and the United Parcel Ser-
vice (UPS) are examples of modern-day mechanistic organizations. CISCO and most high-tech
freed of meaningless “standards” and the other structures that inhibit their work.5
Example 9.3 – Strategic alliance: Verizon and SoftBank Telecom have entered into a strategic
alliance agreement that benefits multinational customers of both companies doing business in Ja-
pan.6
Example 9.4 – Scale vs. scope economies: Another way of defining the difference between
economies of scale and economies of scope is given by Gary Wolff of the Pacific Institute:
Example 9.5 – Being big and small: Bell Business Solutions of Montreal is clearly a big busi-
ness - it has 800 people on staff. But because the company developed out of a merger of many
Example 9.6 – Organizing for customer responsiveness: Jim Yee, at the Union Bank of Cali-
fornia knows that his company serves a niche market, and that customer attention is critical to
providing the services people have come to expect. He focuses on supporting the bank’s strategy
4Elliott, Stewart. “Shows online, brought to you by…” The New York Times. November 23, 3009..
5 Carney, Brian M. “Workers of Europe innovate.” The Wall Street Journal, July 25, 2005, pg. A15.
6 Verizon Business. “Verizon enters strategic alliance.” Total Telecom, June 25, 2007.
EXAMPLES
Chapter 09 - Organizational Agility
9-29
Example 9.7 – Lean manufacturing: Buck Knives in Post Falls, Idaho had a problem. They
were warehousing large amounts of partially-made knives, and those knives took up floor space,
9 Valentine, L. “Reengineering with a Customer Focus.” Bank Systems and Technology, June 1, 2007, pg. 22.
10 Satren, Mike. “Learning Lean.” Post Falls Press, August 14, 2005. Online at
www.postfallspress.com/articles/2005/08/14/business/bus01.prt
Chapter 09 - Organizational Agility
Please see the following additional materials in Connect.
• Zappos
Zappos is an online shoe and merchandise company. Zappos is derived from the Spanish name
for shoes…Zapatos. It is thriving due to its unique organizational culture which emphasizes
billion to purchase Zappos. Tony works in a cubicle and earns less than $37,000 a year as CEO.
Selling shoes online was a challenge because consumers were accustomed to trying on shoes be-
fore buying them. Zappos was faced with a big question – How do you get customers to try out
Zappos for the first time? To solve this problem, Zappos offered free shipping and free returns
Hsieh also wants to make his 1,400 employees happy. He says that he wants them to see their
work as a calling, not just a job or a career. The company promotes a fun environment and em-
powerment for their workers. The company goes as far as offering employees up to $3000 to quit
work as a way to test the quality of their employee friendly environment. Hsieh believes that ul-
timately this approach is making the world a little better place.
How would you describe Zappos as an organization? Mechanistic? Organic? High-or low-
involvement? Why?
There are no Manager’s Hot Seat clips for this chapter
SELF-ASSESSMENTS
CHAPTER VIDEO
SUPPLEMENTAL FEATURES
MANAGER’S HOT SEAT (MHS)
