Managment

1. Discussion Post 4– Chapter 12: Why do you think crowdsourcing has become popular in recent years? What might be some disadvantages of taking a crowdsourcing approach? When might a company be better off taking a more limited approach to open innovation? Please use outside sources and references. (2.5 pts)

Chapter 13:

1. What are the three major phases in Mintzberg's incremental decision process model? Why might an organization recycle through one or more phases of the model? Give an example in each phase.

Chapter 14:

What is the difference between power and authority? Is it possible for a person to have formal authority but no real power? Discuss and give examples.

Chapter 12: Why do you think crowdsourcing has become popular in recent years? What might be some disadvantages of taking a crowdsourcing approach? When might a company be better off taking a more limited approach to open innovation? Please use outside sources and references.

Chapter 14 Conflict, Power, and Politics

Organization Theory and Design

Thirteenth Edition

Richard L. Daft

Chapter

Learning Objectives

Identify organizational characteristics that can cause intergroup conflict.

Compare and contrast the rational and the political models of organization.

Describe the vertical sources of power in organizations.

Explain the concept of strategic contingencies as it relates to horizontal power in organizations.

Define politics and explain why political activity is necessary.

Identify tactics for increasing and for using power.

Interdepartmental Conflict in Organizations

Intergroup conflict requires three ingredients:

Group identification

Observable group differences

Frustration

This type of conflict is similar to competition but more severe

Intergroup conflict can occur horizontally across departments or vertically between different levels of the organization

Sources of Conflict

Sources of intergroup conflict are:

Goal incompatibility

Differentiation

Task interdependence

Limited resources

Marketing-Manufacturing Areas of Potential Goal Conflict

	MARKETING Versus MANUFACTURING
Goal Conflict	Operative Goal Is Customer Satisfaction	Operative Goal Is Production Efficiency
Conflict Area	Typical Comment	Typical Comment
1. Breadth of product line	“Our customers demand variety.”	“The product line is too broad—all we get are short, uneconomical runs.”
2. New product introduction	“New products are our lifeblood.”	Unnecessary design changes are prohibitively expensive.”
3. Product scheduling	“We need faster response. Our customer lead times are too long.”	“We need realistic commitments that don’t change like wind direction.”
4. Physical distribution	“Why don’t we ever have the right merchandise in inventory?”	We can’t afford to keep huge inventories.”
5. Quality	“Why can’t we have reasonable quality at lower cost?”	“Why must we always offer options that are too expensive and offer little customer utility?”

Rational Versus Political Model

The rational model is an ideal that is not fully achievable in the real world, though managers strive to use rational processes whenever possible

Goals are clear, and choices are made logically

The political model involves the push and pull of debate to decide goals and reach decisions

This is how organizations operate much of the time because purely rational procedures do not work for many circumstances

Sources of Conflict and Use of Rational versus Political Model

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Chapter 11 Organizational Culture and Control

Organization Theory and Design

Thirteenth Edition

Richard L. Daft

Chapter

Learning Objectives

Define organizational culture and identify symbols, rituals, stories, or other observable elements that signal cultural values in a company you are familiar with.

Describe the four types of organizational culture.

Explain the relationship between culture, corporate values, and performance.

Explain how managers create a high-performance culture.

Contrast a decentralized culture of control with a hierarchical culture of control.

Explain the feedback control model.

Describe the balanced scorecard’s value for organizational control.

What is Culture?

Culture is the set of values, norms, guiding beliefs, and understandings that are shared by members of an organization

It is taught to new members as the correct way to think, feel, and behave

Organizational culture exists at two levels:

Visual artifacts and observable symbols

Underlying values, assumptions, beliefs, and thought processes

Levels of Corporate Culture

Emergence and Purpose of Culture

Culture provides sense of organizational identity

It serves two critical functions in organizations:

To integrate members so they know how to relate to one another

To help organization adapt to external environment

Internal integration: Members develop a collective identity and understand how to work together effectively

External adaptation: How the organization meets goals and deals with outsiders

Interpreting/Shaping Culture

Aspects of the organization that can help decode the organizational culture AND be used or changed by managers to shape and influence culture include:

Rites and ceremonies

Stories and sayings

Symbols

Organization structures

Power relationships

Control systems

Observable Aspects of Organizational Culture

Organization Chart for Nordstrom Inc.

Culture and Organization Design

Cultures can be assessed along many dimensions, such as:

(1) the extent to which the competitive environment requires flexibility or stability

(2) the extent to which the organization’s strategic focus and strength are internal or external

Four categories of culture are associated with these differences: adaptability, achievement, clan, and bureaucratic

Culture Strength and Organizational Subcultures

Culture strength is the degree of agreement among members of an organization about specific values

Subcultures reflect the common problems, goals, and experiences of a team or department

Subcultural differences can lead to conflicts between departments or divisions

Cultural conflicts can be particularly challenging in the case of mergers and acquisitions

Culture and Performance

Culture has a significant impact on organizational performance

Successful companies are those in which managers are evaluated and rewarded for paying careful attention to cultural values and business performance

Such companies have high-performance cultures

Combining Culture and Performance

The Cultural Focus of Control Systems

Managers consider both control of the overall organization and control of departments, teams, and individuals

Many companies are adopting a decentralized control process rather than a hierarchical control process

Hierarchical and Decentralized Methods of Control (slide 1 of 2)

	Hierarchical Control	Decentralized Control
Basic assumptions	People are incapable of self-discipline and cannot be trusted. They need to be monitored and controlled closely.	People work best when they are fully committed to the organization.
Actions	Uses detailed rules and procedures and formal control systems. Uses top-down authority, formal hierarchy, position power, supervision, quality control inspectors. Relies on task-related job descriptions.	Features limited use of rules; relies on shared values, group and self-control, selection, and socialization. Relies on flexible authority, flat structure, and expert power; everyone monitors quality. Relies on results-based job descriptions; emphasizes goals to be achieved.

Hierarchical and Decentralized Methods of Control (slide 2 of 2)

	Hierarchical Control	Decentralized Control
Actions (continued)	Emphasizes extrinsic rewards (pay, benefits, status). Features rigid organizational culture and distrust of cultural norms as means of control.	Emphasizes extrinsic and intrinsic rewards (meaningful work, opportunities for growth). Features adaptive culture; culture recognized as means for uniting individual, team, and organizational goals for overall control.
Consequences	Employees follow instructions and do just what they are told. Employees feel a sense of indifference toward work. Employee absenteeism and turnover is high.	Employees take initiative and seek responsibility. Employees are actively engaged and committed to their work. Employee turnover is low.

Feedback Control Model

Feedback is used to determine whether organizational performance meets established standards to help the organization attain

Systems for organizational control consist of the four key steps in a feedback control model

Organization Level: The Balanced Scorecard (slide 1 of 2)

The balanced scorecard (BSC) is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company’s critical success factors

A BSC considers four major perspectives:

Financial performance

Customer service

Internal business processes

Organizational capacity for learning and growth

Managers use these perspectives to identify key performance indicators (KPIs) that the organization will track

Major Perspectives of the Balanced Scorecard

Organization Level: The Balanced Scorecard (slide 2 of 2)

BSCs helps top executives and upper-level managers see how organizational performance results from cause–effect relationships

A strategy map provides a visual representation of the key drivers of an organization’s success and shows the links between specific outcomes in one area and performance in another area

Strategy maps are typically complex, with concrete, specific goals, desired outcomes, and metrics relevant to the particular business

A Strategy Map for Performance Management

Department Level: Behavior Versus Outcome Control

Lower-level managers use two different approaches to evaluating and controlling performance and allocating rewards at the department level:

Behavior control focuses on how people do their job and is based on managers’ direct observation and supervision of employee actions

Outcome control focuses on what people accomplish in their job and is based on monitoring and rewarding employee results

Organizational Design Essentials (slide 1 of 2)

Cultural values can contribute to organizational success.

Organizational cultures integrate members so that they know how to relate to one another and help the organization adapt to the external environment.

Organizational culture should reinforce the strategy and structure that the organization needs to be successful in its environment.

Even in organizations with strong cultures, several sets of subcultures may emerge.

Organizational Design Essentials (slide 2 of 2)

The right culture can enable solid business performance through the alignment of motivated employees with the mission and goals of the company.

All effective control systems involve the use of feedback.

The feedback control model includes setting strategic goals, establishing metrics and standards of performance, comparing actual performance to standards, and taking corrective action as needed.

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Chapter 13 Decision-Making Processes

Organization Theory and Design

Thirteenth Edition

Richard L. Daft

Chapter

Learning Objectives (slide 1 of 2)

Explain the differences between programmed and nonprogrammed decisions.

Describe the ideal, rational approach to decision making comparing it with the bounded rationality approach to decision making.

Describe how cognitive biases can cause decision errors.

Explain the management science approach to decision making.

Describe the Carnegie and incremental decision models.

Identify the components of the garbage can model of decision making.

Learning Objectives (slide 2 of 2)

Explain how to determine the best decision-making approach by using the contingency decision-making framework.

Describe how high-velocity environments and decision mistakes influence decision making for today’s managers.

Types of Decisions

Organizational decision making is the process of identifying and solving problems and has two stages:

Problem identification

Problem solution

Programmed decisions are repetitive and well defined

Nonprogrammed decisions are novel and poorly defined

Decision Making in Today’s Environment

Rational Approach

The rational approach suggests an “ideal” method for how managers should make decisions:

Monitor the decision environment

Define the decision problem

Specify decision objectives

Diagnose the problem

Develop alternative solutions

Evaluate alternatives

Choose the best alternative

Implement the chosen alternative

Steps in the Rational Approach to Decision Making

Bounded Rationality Perspective

Many decisions must be made quickly, and managers cannot evaluate every goal, problem, and alternative

The bounded rationality perspective is how decisions are made under severe time and resource constraints

Constraints from both organizational and personal circumstances can impinge the decision maker

The bounded rationality perspective is often associated with intuitive decision making, which is the use of experience and judgment, rather than sequential logic or explicit reasoning, to make decisions

Constraints and Tradeoffs During Nonprogrammed Decision Making

Cognitive Biases

Managers must be aware of their cognitive biases, or severe errors in judgment that all humans are prone to and that typically lead to bad choices, including:

Being influenced by initial impressions

Seeing what you want to see

Being influenced by emotions

Being overconfident

Escalating commitment

Fearing failure or loss

Being influenced by the group or groupthink

Managers can avoid cognitive bias through evidence-based management and the encouragement of dissent and diversity, including the assignment of a devil’s advocate

Organizational Decision Making

Managers can use one of four primary types of organizational decision-making processes:

Management science approach

Carnegie model

Incremental decision model

Garbage can model

Management Science Approach

Management science involves the use of mathematics and statistics to:

Identify and quantify relevant variables

Develop a quantitative representation of alternative solutions and the probability of each one solving the problem

Management science can accurately and quickly solve problems that have too many explicit variables for adequate human processing

A drawback of management science is that quantitative data are not rich and lack tacit knowledge

Carnegie Model

The Carnegie model is based on research that indicated that organization-level decisions involved many managers and that a final choice was based on a coalition among those managers

Management coalitions are needed because:

Goals are often ambiguous and inconsistent, with disagreement about priorities among managers

Individual managers intend to be rational, but they function with constraints

Coalition building implications for organizational decision behavior include:

Satisficing

Problemistic search

The importance of discussion and bargaining

Choice Processes in the Carnegie Model

Incremental Decision Model

The incremental decision model emphasizes the structured sequence of activities undertaken from problem discovery to problem solution

Organizational choices are usually a series of small choices that combine to produce a major decision

Decision interrupts are barriers to decision making

Organizations move through three decision phases:

Identification Phase

Development Phase

Selection Phase

Dynamic factors may force a decision making loop or cycle back to an earlier stage

The Incremental Decision Model

Combining the Incremental and Carnegie Models

The Carnegie model of coalition building is especially relevant for the problem identification stage

The incremental model tends to emphasize the steps used to reach a solution

When both parts of the decision process are simultaneously highly uncertain, decision processes in that situation may be a combination of the Carnegie and incremental models

Decision Process When Problem Identification and Problem Solution Are Uncertain

Garbage Can Model

The garbage can model deals with the pattern or flow of multiple decisions within whole organizations

It was developed to explain the decision making in organized anarchy, the highly uncertain conditions that some organizations experience as a result of:

Problematic preferences

Unclear, poorly understood technology

Turnover

Decisions are made from streams of events—problems, potential solutions, participants, or choice opportunities—instead of defined problems and solutions

Consequences of the Garbage Can Model

Solutions may be proposed even when problems do not exist

Choices are made without solving problems

Problems may persist without being solved

A few problems are solved

Illustration of Independent Streams of Events in the Garbage Can Model of Decision-Making

Contingency Decision-Making Framework

The use of a decision making approach is contingent on the organization setting

Problem consensus refers to the agreement among managers about the nature of a problem or opportunity and about which goals and outcomes to pursue

Technical knowledge refers to understanding and agreement about how to solve problems and reach organizational goals

The contingency decision-making framework brings together these two dimensions

Contingency Framework for Using Decision Models

Special Decision Circumstances

Managers have to make high-stakes decisions more often and more quickly than ever in increasingly less predictable environments

To improve the chances of a good decision in high-velocity environments, some organizations stimulate constructive conflict through a technique called point-counterpoint

Managers and organizations go through the process of decision learning by making mistakes and by acquiring sufficient experience and knowledge to perform more effectively

Organizational Design Essentials (slide 1 of 2)

Decision making involves the stages of problem identification and problem solution.

Decisions vary in complexity.

Most organizational decisions are not made in a logical, rational manner, nor do they begin with the careful analysis of a problem, followed by systematic analysis of alternatives, and finally implementation of a solution.

Allowing cognitive biases to cloud decision making can have serious negative consequences for an organization.

Organizational Design Essentials (slide 2 of 2)

Individual managers make decisions, but most organizational decisions are not made by a single individual.

Many problems are not clear, so widespread discussion and coalition building take place.

Managers can follow the prescriptions of the contingency decision-making framework to use the correct decision-making approach and increase the likelihood of a successful decision.

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